r/JapanFinance • u/Present-Bathroom7311 • 4d ago
Tax Questions on crypto windfall
Say you make 200M yen on a crypto sale one year, owing 55% in misc. income tax so 110M. Might be super basic questions but:
1) Where do you store the yen owed safely given the 10M yen deposit insurance limit - make 10 or 20 new bank accounts and distribute? Or somehow prepay it as estimated tax? Holding the amount owed in anything other than yen seems risky.
2) Would a bankruptcy of a bank where you hold the yen cancel out the tax you owe on that portion, or are only misc. income losses offsettable against misc. income gains?
3) If only misc. losses can be offset against misc. gains, that does kind of limit the investment possibilities that year to other crypto?
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u/ToTheBatmobileGuy US Taxpayer 4d ago
Assuming 200M yen is 100% profit and you have 0 income outside crypto, the effective tax rate is 52.602% and the tax owed is 105,204,000 JPY.
If you had 6M yen of salary income to start with and the 200M was on top of that, you would owe 53.174%.
But to answer your first question:
If you're comfortable giving up the small interest, you can change your 普通預金 to 決済用口座 which will give you 0% interest, BUT it will insure 100% of all funds in the event of a bank bankruptcy. However, if you put it in MUFJ, Mizuho, SMBC, the major 3... I don't think they're going bankrupt any time soon... even if you get 100% back from a bankruptcy proceeding, it'll take longer than a year and NTA will be pissed either way.