Duca：如何缴纳加密税、节省开支、《大而美法案》及更多 | TG Podcast

Boom. Duca, what's up, man? Welcome to the stream. How are you, dude?

Thank you. I made sure to wear my Phantom shirt.

Awesome, bro. What the fuck?

Yeah, I went to the Phantom office in NF maybe a couple months ago, and I got some free swag, so I wore it.

Welcome to the stream, man. I come to you with a heavy heart today. Do you want to give a quick intro into who you are?

Yeah, for sure. I'm not a CPA or an accountant. Actually, I'm a developer who thinks this whole thing is just ridiculously painful and annoying. That's why I built Awaken, which is a bunch of crypto natives building a tax product. A lot of the other tax products are tax people building crypto products, and they're very hard to use. The UX is bad, they overestimate gains, and all of that stuff.

I'm Duca, really passionate about solving the crypto tax problem.

Okay, you're not a CPA. Whoa. Okay. Dude, I've had a rough week with the fucking taxes. I never envisioned bringing an accountant or tax software on stream, but I figured it was time. I've had a tough week with the fucking taxes, dude.

Yep, it's tough. I think crypto taxes are painful for a couple reasons. The first is that we have unclear rules. With things like airdrops, you'll get a token and it will crash half the next day. Or bridging and wrapping, which are tax events—the IRS hasn't said anything.

We also have insane tax rates. I live in LA too. I went to the gym this morning, hit a pothole, and went downtown. There are zombies everywhere, right? We pay all this money into the tax system, and it's like, where is it actually going?

Crypto taxes are hard for a couple reasons. The first is that the rules really aren't clear. The second is, where is the money going? The third is software in general. The software overestimates gains and has a lot of problems, and that's where I spend a lot of my time.

It's a really painful thing. In general, I think we want to bring the world on-chain, right? That's our goal here. It's ridiculous that taxes are so painful and are actually stopping a lot of people from wanting to use blockchains for finance, which is the whole point of this.

So it's 54%? This is just what it is in LA on capital gains? You just get cooked. There's nothing you can do. Is it really—

Go ahead. Sorry.

It is hard because you actually said this in some of your threads, and I think it's interesting. The tax code promotes two big things. The first bucket is making businesses, and there are a lot of tax incentives for making businesses.

A really popular one for founders is QPS, which means that if you create a company and hold your stock for 5 years, you can literally sell up to $10 million in capital gains tax-free. The second is real estate. We have all of these benefits for those two buckets of assets and creation, and they don't really exist for crypto yet. That's kind of a problem.

In general, short-term gains are taxed extremely highly in the US. If you're in California, like both of us, it's even more painful.

It is really annoying. There are a couple things you can do, but it depends on your situation. We can follow up off-stream because I'm happy to take a look and see if there's something we can do to help.

There are two main things. The first is to make sure that all of the meme coins and assets you buy that are underwater are actually sold, so they can offset your gains. The second is that there's no wash-sale rule in crypto, so you can sell assets for a loss, buy them back, and use those losses to offset gains.

Those are the two main things you have. You can also talk to CPAs and advisers who will set up more complex entities to try to save you on taxes, but with an increase in administrative burden. You have to weigh that.

It's really high, and it's ridiculous. A lot of people, including me and you, are paying all this money, and it's like, where is the money actually going?

If you look at what the IRS spends money on, 33 cents out of every dollar goes to elderly services like Social Security and Medicare. A lot goes to interest, and by the time you get down and look at what the IRS is spending money on, none of us feel like we're benefiting.

I think that's the big problem in the US right now. A lot of people are asking, where is my money going, and is it actually going to things that are making my quality of life better? A lot of us feel like it isn't.

Wait, what do you mean, 33 cents on every dollar?

Yeah. Thirty-three cents of every dollar the IRS collects literally goes to Social Security and medical etc. services for elderly people.

And what is Social Security? Do you start earning Social Security at 55?

Yeah. For Social Security, once you get above a certain age, the government will send you some money. My grandparents, for instance, are on Social Security. It varies from person to person and depends on how much you pay into the system.

It is a very large program, and it's kind of a big problem in the US. Social Security is this big problem because we're all basically paying into it. We have an elderly population that's increasing, and we're all paying money into that to pay those people. When we get there, there's no money left, right?

It's this big problem. I think the IRS is trying to collect as much money as it can, but it's being allocated to all these things. This is a big problem in the US right now, and a lot of people in politics and government are trying to figure out a solution.

For us, we're paying these massive tax bills. With you, I don't know if it should be 54%; we should talk offline about that. But we're paying very large amounts of money, and it's ridiculous.

I've never understood the Social Security thing, because by the time I'm 55, that shit's going to be empty, isn't it?

One hundred percent. The hope is that the younger generations end up refilling it, but a lot of us are having kids later or not having kids. That creates this whole problem.

A lot of developed countries end up having populations that decline. This is a big Elon Musk thing that he talks about, which I actually agree with: populations go down over time because we're not having kids. How are we going to fill that bucket so that we have money to make—

Somebody in the chat said it's like $5,000 a month.

Really high.

And that's coming from us.

$5,000 a month? That's insane. That's like a full-time job. These are complex systems, to be fair, but it feels broken, right?

I think you admit, and I admit, and a lot of us feel that way. That's why people get so angry on X and why all of us are talking about this a lot. We feel angry. Why is this how the whole system is working? $5,000 a month is heinous.

I posted this thread, and then I got hit up by all these people who had a take. First of all, everyone's like, "You should fire your accountant." I actually think my people did a pretty good job. I'll ask you afterward, but I think they did a pretty good job.

Everyone's like, "Dude, why didn't you just make an LLC? [__] like this. If you made an LLC, you'll be paying no tax." I've had 50 people say this. I'm like, "Bro, that's not how it works. That's not how it works."

You don't just make an LLC. It's the stupidest take ever. Where does that come from?

That take comes from the idea that if you have a business and attribute income to that business, and you have other write-offs, those can offset the income you're making because you're grouping it all into this business. But it's not like you don't pay tax on that.

I think there are a lot of people on X who don't really understand how a lot of this stuff works, but they're angry about paying taxes and have lots of different takes. It's important to talk to a CPA or tax professional who can help you navigate these things, because that's not how it works.

You can talk to a lot of CPAs, and there are things you can do, but it's not as simple as making an LLC or any of those things.

The other thing that's difficult with crypto is that a lot of times I just do a lot of transactions on-chain in crypto, and you don't necessarily keep receipts. I found this out the hard way after going through about 2,000 transactions.

I'm pretty bad with receipts. My room's kind of a mess, as you can probably tell. I'm not the spreadsheet guy. I think I have a lot of transactions that get marked as income when they're not, and other weird stuff, because the on-chain tax software services just aren't that good.

They're really good at buys and sells, profit, and loss, but everything else they're really bad at.

Absolutely. Yeah, that's kind of across the board, and that's basically why I made Awaken back at the end of 2022: exactly what you're saying. A lot of them overestimate gains, and I think for a lot of memecoin traders specifically, if you're using trading bots like Photon or Axiom, they don't actually factor the fees into your sales. They don't use that to write off your sales, so you should double-check your numbers if you're using other platforms.

So, what if you're Cubsy and you trade 5,000 coins a day, every day, for the last 2 years? What does he do for his tax situation?

Yeah, I mean, you definitely want software. Awaken's great. There are other products that are great too, but the whole point of tax software is that you give us your wallet, we import all of your stuff, and we run our tax engine on it to calculate everything and try to find write-offs for you.

For example, if you're paying all these fees on trading bots—they charge 1%—that adds up. Some of our users have paid a quarter of a million dollars in fees to Photon, right? You want to write those off. You shouldn't be paying tax on a quarter of a million dollars that they think you made, right? In general, the software is really good at taking all the data and making sense of it. That's what Awaken does, and other products do that as well.

Is that definitely accounted for? I didn't even think about that. I have to write that down.

You should double-check, because I'm not saying that whichever product you use, or your CPA or accountant, didn't do that. But I've seen a lot of other products where they don't write these fees off because it's not easy. You have to add custom parsing to be able to write those things off. We do this because a lot of our users use trading bots, but you should double-check because it can be significant.

Whoa. I didn't even think about that. It probably is significant.

Yeah. Huh. So, it's good to double check. Maybe your accountant did it, but it's always good to double check because if it didn't, you know, if they didn't, you could save a lot of money because those are write-offs. Like, that's factors into your cost basis of the assets you're acquiring and when you're selling, too.

Actually, first of all, I know there was all this discourse a while ago when Trump was running for president on 0% tax on crypto gains. Is there any chance that that happens? Like any remote chance?

Very low.

How low? Like zero?

I don't want to say zero. I'm a developer, so I don't know. I'm not in the government or anything. I'm just trying to make this easier for people to stay compliant, but it's pretty close to zero.

The U.S. government isn't in like in so much debt, and all the money they raise is going to all these different things. They kind of need these income streams, right? It's actually kind of ridiculous that a lot of airdrops that were really popular, like hyperl liquid were flagged, and U.S. people weren't allowed to get them, because that would literally be billions of dollars for the IRS. They were flagged, right? So you can't geoblock, and it's very low, basically.

I do think that tomorrow there's some stuff that's going to be talked about, and we'll see what happens there. It's not going to be no capital gains on crypto, though. I think the government is in too much debt and needs to raise too much capital to do something like that. Unfortunately, I would like lower taxes, at least on crypto.

Is there anything you recommend crypto people set up, other than just tracking it better? Are there things you recommend traders who are primarily doing short-term capital gains set up beforehand—LLCs, business structures, or anything like that—to make this easier?

Yeah. I don't want to shill Awaken too much, but I think you should set up Awaken. If you have problems, that will help you track everything so you can actually understand it. A lot of times in tax, you can save money if you're proactive. There are probably write-offs sitting in your account right now that, if you make an account on Awaken or other products, you can write off before the new year. It's important to lock those in so they actually offset your gains for the year.

That's number 1: set up tax software. Awaken's great, and Coinly is great too. I'm not going to only shill Awaken. I would set that up, and then, if you want to talk to a CPA, we have a list of really good crypto-specific CPAs who can help you work through whether, in your specific situation, it makes sense to set those things up.

It varies from person to person, and there's always a con to every pro. There's an administrative piece and all these other things, so you should talk to a CPA who understands this stuff. There's a very small set of CPAs who understand it. We have a list of good ones, and I would recommend talking to them about that as the second thing. Then set up some type of tracking system so you're not caught off guard and can actually minimize things. You have to lock that in before we get to 2026.

Can you explain this looping system where people—I have a lot of Bitcoin, right?—borrow against their Bitcoin, get low-APY fees, and spend that money? Explain the rationale behind that system.

Let's say you bought Bitcoin for $1,000, and now it's $100,000. If you wanted $100,000 and sold that Bitcoin, you would owe tax on $99,000 of gains.

Versus if you take out a loan against that Bitcoin, and maybe it's overcollateralized, you can pull out, let's say, $50,000 tax-free because you didn't sell your Bitcoin. You locked your Bitcoin up.

The thing is, if that Bitcoin is liquidated because Bitcoin crashes a lot, then it triggers a sale and does trigger tax. The key here is that you take out a loan, get USDC or whatever you received in the loan, and use it. You do have to pay that back with interest, right? You don't have to pay it off immediately, but it doesn't trigger capital gains on your Bitcoin.

It's really common for people who are very bullish on Bitcoin. With the rise of Morpho in general, people are using their Bitcoin holdings because they want to hold it for a long period of time, but they want liquidity without triggering a massive taxable event. You can take out a loan in USDC. You do have to pay off that loan, so you need some way to pay it off, but you're not triggering a taxable event on that Bitcoin.

This is really popular. It's not even just a crypto thing; it's traditional finance too. Most founders—for example, Vlad of Robinhood—don't actually sell their stock. They take out loans against their stock. It's very common because you can save some money, but you do have to pay back the loan. It's not like you're just getting free money.

Okay. I'm assuming you have some clients who make $50 million a year in crypto.

Oh, yeah.

You do, right? You have some 9-figure clients a year, I would imagine, or close?

Yeah. I was with 8-figure clients this past weekend, right? We have a lot of people who make a lot of money on-chain.

What do they do? Are they just paying 8 figures in capital-gains taxes, or are they borrowing against their stuff? What do they do?

It's a mix. A lot of these people can't necessarily borrow against their stuff because they're making short-term trades, right? They're really active traders, and all of that goes into a separate bucket. They're not holding Bitcoin, taking out a loan against it, and being able to do things that way. They're actively trading, so those are short-term gains, and generally these people are just paying tax. They're just taking the hit.

Unfortunately, a lot of people who are really active traders can't take advantage of looping because maybe they're not holding a bunch of Bitcoin that they could take out a loan against. It definitely varies. A lot of our highest-earning people are trading perps heavily. They're trading all these different things—really, meme coins, et cetera—and all of those fall into a certain bucket because the holding time is really short. There's not much you can do.

Okay. I don't know if you can answer this. If you can't, just don't. What's the biggest tax bill you've ever brokered in crypto?

Yeah, you can't answer that.

I don't. Yeah, I probably can't say that in general.

Yeah. Sorry. Sorry. Sorry.

But I love the question. I wish I could. Large, though. Large.

What about the—okay, so what about the Puerto Rico loophole? Is that something you recommend people do?

I mean, not necessarily. You could talk to a CPA, and they can see whether that really makes sense in your particular situation. In my opinion—and you're probably not going to like this—but if you like living in the U.S. and make a lot of money, the whole point of making money is that you get to do the things you want to do. I think you should always look at it through the lens of doing the things you want to do. Life is short, right? Don't necessarily do things just to avoid tax.

It can be significant, and everyone is different. But the whole Puerto Rico, Dubai, and all those types of things involve a lot of complexity, and you want to talk to a CPA to actually understand them. It varies from person to person, so a CPA can't even give a blanket statement about that type of stuff.

Makes sense. Also, I want to preface this by saying I know we're on stream. I'm compliant; I'm just asking questions. Is there something you can do where, if you live in California, you set up a business in Florida or something and pay Florida taxes? Is that a thing people do, or is there no way?

Some people split their time throughout the year, spending half of it in one place and half in the other. California actually has some stuff trying to block that, because they're realizing that's happening. They're saying, "Hey, you're basically living in California almost half the year, and then you're going over here." I think that loophole might be tightened up, but these are questions that vary from person to person. Even CES can't give a blanket answer because it's challenging.

There are people who do things like this, and I think they're kind of loud right now. California specifically is looking into this because California is really expensive to live in.

Fucking insane, man. I don't get this. It's crazy. It's crazy.

The whole thing just feels—well, I think a lot of us feel like that. It's like, what the heck is happening? We're trying to do these things. But yeah, that does vary from person to person, so it is important to talk to a CPA about it.

I feel like the thing I'm learning now, after talking to a bunch of people about this, is that short-term capital gains tax just fucking sucks. That's just what it is. There's really nothing. I'm sitting here like, "What's the method?" I'm looking for the loophole. There's no loophole. There's no method for this at all.

I posted that thread yesterday, and I was expecting all these smart people. I was expecting one of them to DM me like, "Yo, I got the lube. I got the method." And everyone's like, "Brother, just make more money." I'm like, "Wow."

Just work harder. That's how it is. Yeah, there aren't really any loopholes. The main loopholes—or those two buckets I was talking about—are making a business or real estate. Both of those have so many incentives for people. But if you're doing anything short-term, it's brutal. That's just how it is.

I think borrowing against Bitcoin and stuff is interesting, but then you have to pay it back. It kind of defeats the purpose, doesn't it? Am I missing something there?

No. It doesn't necessarily defeat the purpose, because you're kind of just accruing interest. Unless you get called and your Bitcoin is liquidated, it can keep accruing. But you do have to pay it back at some point, right?

It isn't a full loophole. None of these things are loopholes, right? Everything has a pro and a con, and this is definitely one of them. But a lot of people are doing that. They're borrowing against their assets. That's why Morpho on Base, in general, and some of the DeFi stuff happening there is exploding. A lot of people on Coinbase are borrowing against their Bitcoin or their ETH because they've been holding it for a while and don't want to sell it. That sort of thing is pretty common.

But yeah, there's no free lunch in any of this. There's no free lunch. You know what? The reason my situation is so brutal, and I didn't really pay enough attention to it, is because I had a really good year in 2024. It wasn't the good year, but I had no losses in 2024. It was mania. It was AI season, and I just wasn't thinking. I was like, "Brother, I'll pay whatever tax you want to give me."

I locked in these crazy gains for 2024 with no losses to offset. They all carried over to 2025, and it's like, cool, for the fall I'll feel good come April, but you're locked in at this ridiculous rate.

Yeah.

Right. It's like a window of time, and you owe it to that window of time. I didn't strategically plan that at all. Now I'm like, "Fuck." My losses all happened in 2024, but I sold them in 2025.

Yep. And now I'm looking at this number like, "Bro, this number is ridiculous."

Yep. That's very common, and it's not great. That's one of the things I hope Awaken can solve. A lot of taxes are reactionary, whereas software should literally just email you: "Hey, you have $300,000 of losses sitting here that you didn't claim. Do that in the next week. Do it right now."

It should be more proactive because none of us want to think about taxes year-round, right? None of us want to think about that. It's the worst thing possible to think about. But there are benefits to being a bit proactive, and hopefully Awaken can give you enough information to be proactive while still allowing you not to think about it most of the time. It makes a really big difference. These are windows of time, and you want to lock that stuff into those windows. If you don't, it's challenging.

So you just wake up and think about taxes every day? That's what you do?

You don't do that.

That's sickening, dude. You wake up tomorrow, get off this call, and talk about taxes more. It's awful. The world needs people like you.

For me, to be honest, the first year I made Awaken, no one was really using it. It was really hard to get users, but we'd get a user here and there. I would obsess over them and solve their problems. Someone would message in with an issue, and a developer would look into it within a second. But I'm a developer, so I'd go fix it, ship it, and they'd be like, "Oh my God, thank you so much."

For me, the little bits of joy from building a tax product are that I can take someone who's panicking and thinking, "Oh my God, this is the worst ever," and switch them to feeling relieved. That's satisfying for me. I latch onto that when I'm diving through CSVs. I hold on to those moments, and then I keep doing it.

I feel like I obviously have to try it because I'm fucking sweating over here. Do you just need every wallet I've ever interacted with, and it just works? How does it work?

It should just work. I can follow up, and we can chat offline about this.

Yeah, let's talk. We'll talk offline.

Perfect.

And you just input 30 wallets or whatever, and it runs its thing?

Yeah, we have thousands of wallets. You add them all in, and we start doing the numbers.

The other thing is that I had to work really hard to find my wallets because I have multiple computers and old computers. It was a multiday process just to accumulate everything.

Yeah, it takes a lot of time. We have some things that try to make it easier. If we notice you sending to a wallet a lot, we'll say, "Hey, this might be yours." But it will take some time, especially because a lot of people have a lot of wallets. It's a security thing. Plus, you don't want people following you, right? I'm sure that's the case for you because everyone wants to follow your wallet, right?

It becomes challenging.

Okay, last question for now, and then I'll let you go offline. This is chat's question, not mine. Can he answer about using Zcash or Monero, and whether you don't have to pay tax if you use those things, or what?

I don't know.

It’s just a question. I don’t know.

Both are good. You probably want to have Mert on to talk about Zcash. He’s just all over the timeline. Mert’s actually one of our investors, but he’s all over the timeline about all that stuff. You probably want to have him on for that.

Technically, all of this stuff—just because it’s private, or even if you’re not allowed to use it—if you’re using Hyperliquid in the US, you’re not allowed to. You have to actually declare all that on your tax return. It’s actually illegal not to do that if you get caught. So all this stuff still has to be declared, even though—

Hypothetically, if you were using Hyperliquid illegally in the US and you paid taxes on it, is that—?

You’re okay. It’s totally fine because, in general, any of these products—by the way, when they geoblock, the user of it is the victim. It’s the platform’s job to properly deal with you; you don’t get in trouble. But you’re supposed to pay tax on that because we have a lot of users in the US, and a lot of them have Hyperliquid even though they’re not supposed to. But they are paying tax on it, right? So you’re totally allowed to do that.

All of this stuff could be private, but technically, you’re still supposed to. Whether or not you do, that’s kind of up to you. There’s a lot of risk. You’re not supposed to do that, though. But yeah, you’re supposed to pay tax on all that.

I’m not doing that. I’m just a vessel for the chat to ask the rest of the questions.

Yeah. No, no. You’re all good to go. Honestly, the fact that you’re even doing this and talking about it—most people don’t. So it’s actually good in general. And I think as the crypto space matures, we need more people to be talking about this stuff.

Hopefully, there’s some stuff in the tax code that gets clarified to make some of this stuff not as annoying for everyone, and make it an asset class that’s maturing to be an asset class just like real estate or those things. Hopefully, we start to see things like that.

Okay. Well, here’s what I’m going to say: I’ll message you when I get off stream and I’ll try the product. If I have to pay, it’s totally fine. And if that number comes down, expect some referrals, man. That’s all I can say. But dude, thanks for coming on, man.

Yeah, thanks for having me. It was a lot of fun.

I wish you could come on and say, “My bill is 50% less than I think.” It doesn’t feel like it’s going to happen that way, but I’m excited to use the product and try it out. And dude, you have a ridiculous amount of support on CT. It’s wild. All the chats are like, “This is the guy.”

Taxes.

I know—for taxes. The stream numbers are up for taxes. It’s lit. So I think chat genuinely wants to know how it is. I’m actually going to try it, so I’ll message you after stream. We’ll talk a little bit. Is there anything you want to sign off with?

No, I think that’s it.

Sick, man. Duke, you’re the man, dude. Thanks for coming on, bro. I appreciate the time.

Thanks for having me. Peace. Bye.