Which to sell?

[OkiBum]

If I sell crypto, I approximately need to pay approx 20% capital gains correct?

No, crypto gains are treated as miscellaneous income. So it gets lumped in with your salary, etc, and affects your tax band and residence tax too. You pay whatever the tax works out at for your band, after deductions.

Isn't it better to sell 400k worth of units from my NISA and pay 0 yen to Suga san?

You don't have to pay tax if you sell from the NISA, but you are also irreversibly locking yourself out of future tax-free gains.

So the question is are the potential gains over the next two years in the NISA likely to make up for whatever tax you will pay if you sell a taxable asset?

If you pay 50% income tax, for example, you'll need to sell 800k of crypto to get 400k in return after tax*. If you think NISA asset is likely to grow more than 400k, it's best to sell the crypto. If not (or you don't want the tax headache), sell the NISA asset.

*That's assuming you bought it at zero, so it's not as bad as it sounds. Actually you only pay income tax on the gain.

I definitely don't pay 50% income tax, but at the same time I don't know how much % I do pay as income tax. Is this info written on my 年末調整 or some other document?

[zeroshiki]

It means you have to add the 400k in crypto to the 8M you made in the year. You would be taxed in that scenario 23% (marginal tax rate between 6.95M and 9M)

Thats just income tax though, your residential tax and other stuff might change too so you might need a tax accountant at that point.

In conclusion, sell the NISA if the hassle of selling the crypto is not worth the 2 years of NISA growth (it seems like you want to hold onto this anyway).

[adamu]

Is this info written on my 年末調整 or some other document?

Also worth considering is that if you sell the crypto, you need to do a tax return to pay the tax next year, so no 年末調整 this year.

I don't think the band is clearly written anywhere Your residence tax bill shows the amount of taxable income, but it's pretty unclear. Good question

[OkiBum]

https://www.japan-guide.com/e/e2206.html

Japan guide mentions that I only need to report:
- if they have side income of more than 200,000 yen

So if I sell units worth 390k (to be on the safe side) and my cost of units purchased is 200k, that would mean that my side income is 190k hence I don't need to pay any taxes?

[OkiBum]

I think #3 is the clear winner here. Glad I asked here before selling

Never really put in much thought of which funds to sell in the past, new experience, thanks to RJ

[tokyolights]

Wanted to jump into this discussion to ask if it would be smart to get some small loan / credit here instead of undoing any invested positions. I know that debt should usually be avoided when possible but if done smartly / carefully, I wonder if it could help save money in cases like this?

[beanhead]

Wanted to jump into this discussion to ask if it would be smart to get some small loan / credit here instead of undoing any invested positions. I know that debt should usually be avoided when possible but if done smartly / carefully, I wonder if it could help save money in cases like this?

We don't know the reason for the OP needing the 400k, but general advice is to invest only what you do not need for everyday life. An emergency fund for taking care of unexpected costs would negate the need for selling off anything, or borrowing money.

[tokyolights]

We don't know the reason for the OP needing the 400k, but general advice is to invest only what you do not need for everyday life. An emergency fund for taking care of unexpected costs would negate the need for selling off anything, or borrowing money.

True, but it may happen to us at some point regardless, an unexpected hurdle or a miscalculation! Once you're in that situation, I wonder if borrowing could end up being less costly than selling a position...