if you had a kid today and sold your 1BTC($64k) and put the fiat into stocks/shares at a 8% interest
by the time your child was 20yo the investment would cumulate to $276k which you can then pay them $22k a year and keep the $276k capital
Isn't that simple.
You need to pay from $22K a year capital gains,
which is 11% for short term capital gains tax. So you only have $19.5K, we shouldn't forget with the inflation rate too, $276K capital today isn't same to $276K capital in the last 20 years. On paper your investment grow 4x times, but in purchasing power your investment only grow 1.5x times.
$19.5K a year in US is small, imagine you've invest for 20 years, but you still not able to live from your investment.
lets start at the end then work up
yes $22k is not enough to live on.. that was the point it was that taking 1btc OUT OF bitcoin and putting it into common shares would not lead to generational wealth
now handle your numbers about cap gains
people are given an allowance of tax free income before being taxed.
so lets handle the actual numbers
64k turning into 276k is a 4.3125x gain
meaning of 22k withdrawal its only really $5.1k of initial investment withdrawal(of the initial 64k) and the other 16.9k is the gain which we now have to deal with the tax rate
its firstly not short term as the shares were held for 20 years not 1 year.
secondly the total income claimed (realised value) is $22k which, and ill quote
Source: Internal Revenue Service
Long-term capital gains tax rates for the 2024 tax year
FILING STATUS 0% RATE 15% RATE 20% RATE
Single Up to $47,025 >$47,025
so because the income is under $47k(the $22k withdrawal) its in the 0% cap gains tax percentile
..
but back to my first line of response.. we can both agree that taking funds out of bitcoin and using it for common shares for inheritance, no it wont generate 'generational wealth'