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The recent ascent of bitcoin and other cryptocurrencies has enriched early investors with returns more akin to the lottery than your typical bread-and-butter investment. After all, a $10,000 investment at $100 per bitcoin would currently be worth an estimated $5 million.

Of course, when an asset experiences exponential growth, it can invite some problems by way of tax exposure. Bitcoin has been called a lot of things, but the IRS views it property and not currency and taxes it accordingly. That means that all profits will be subject to short-term or long-term capital gains taxes.

To the extent that you sell your bitcoins within a year of purchasing them, any gains would be taxed at your ordinary income tax rate. Should you hold on for one year or longer, you would likely be subject to a long-term capital gains rate of 15%, depending on your income.

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Some would venture to say 15% of a large number like $5 million is a steep price to pay for being right. How, then, can the owner of a low-cost basis investment liquidate their holdings, diversify a concentrated position, receive a tax deduction, enjoy lifetime income and pursue philanthropic endeavors at the same time?

The answer may come in the