/biz/ - Business & Finance

>>3679472
> your capital gains are realized after every single trade

Same as any capital gains. When you sell crypto, you need to report the number of units you sold, as well as the purchase price of those units. Then you pay capital gains tax on the difference.

Ignore taxes but never cash out of crypto.
If you need a few hundred USD go to bitcoin atm.

>>3679491
You mean going from crypto to usd right? Not just any given crypto/crypto trade? God that'd be a fucking nightmare.

If I were to swap crypto for gold/silver on like Uphold or something. What kind of laws apply then?

> t. ignorant burger

when you cash out to government fun bucks.

>>3679491
>>3679511

ARE YOU FUCKING KIDDING ME?!

I THOUGHT YOU JUST WITHDRAW IT FROM COINBASE, KEEP TRACK OF THE COINBASE WITHDRAW AND THEN REPORT IT!?

WHAT THE FUCK

I CAN'T KEEP TRACK OF ALL THE FUCKING SHITCOINS I TRADED.

>>3679532

CAN'T I JUST WITHDRAW IT FROM COINBASE AND PAY THE 15% I WITHDRAW FROM IT AT ONE TIME!?

I CANNOT KEEP TRACK OF ALL THAT

>>3679532
>>3679555

But that's literally all you have to do, tard. Print out your Coinbase tax sheet and give it to your accountant. Trades in between don't matter.

>>3679511
even if you trade something for another coin, you're supposed to report it as a gain.

>>3679568
>accountant
ahahahahahahbahahagagahhagzyegshgsuwyahhahahahahahhahxuhshahahhahahahahahha

USD has to leave Coinbase and hit a bank account correct?

>>3679824
underage spotted

If I cash out 80% of my initial investment and just file it as a loss do you think the IRS will look into it further or just leave it at that?

Or do you think it'd be better to just pay out double my original investment and pay the taxes on that, so they get a little bit of tax money (enough to keep them happy)

Which do you think will work better?

>>3679511
LOL, dude it is just like stocks.

>>3679784
False. There is no "gain" until you cash out.

>>3679867
You know that they throw people in jail for tax fraud, right?

>>3679887
This is completely wrong. Holy fuck, so many of you are going to be ass raped by the IRS. You don't think these exchanges have information sharing?

>>3679887
bwahahaha enjoy your priston stay for tax fraud boys

>>3679891
Yeah whatever

>>3679909
>so many of you are going to be ass raped by the IRS. You don't think these exchanges have information sharing?
this is what LINK is for

moon here we come

Read this: https://www.google.com/search?q=Notice+2014-21+-+Internal+Revenue+Service

The IRS has yet to make a definitive statement on how crypto is taxed. It's generally considered to be a like-kind exchanges so capital gain tax is deferred but because it's classified as property some people think each trade is taxed.

What is the answer? Nobody actually knows.
The IRS REFUSES to make a statement on what the case is and there have been zero cases of the IRS going after people for not keeping track of capital gain on every trade.

You can play it conservatively and pay tax on every trade or pay when you cash out. The choice is yours.

But until the IRS actually comes out and makes a statement on what the case with Crypto is you are safe.

>>3679909
>>3679914
>Throw 100 bucks in coin x
>It goes up 500%
>30% taxes mean you owe $150 in taxes
>Move coin x to coin z
>Coin z nosedives and is only 25% of what you bought in at
>You now only have 125 dollars
>IRS apparently takes all of that and demands 25 dollars more

???

>>3679953
>But until the IRS actually comes out and makes a statement on what the case with Crypto is you are safe.

No, they can issue a position and change their position retroactive. A good example is their change in the tax treatment of silver and gold exchanges in the 80's. They charged back taxes and penalties even on people relying on their previous guidance.

>>3679953
You realize a two page 8824 form must be filled out for every like-kind exchange, right? And you think this applies to crypto trades, or that shitcoiners have actually been doing this? lol

>>3679472

For most of you double-digit IQ underage retards, how it works is you hire a CPA for a couple hundred bucks and they'll take care of it for you. They'll probably ask for the csv spreadsheets that any reputable exchange lets you download with one click. No need to half-assedly write down your trades with crayons into a coloring book.

>>3680055
>They charged back taxes and penalties even on people relying on their previous guidance.

Why is this institution allowed to exist, again?

op here. the responses made me more confused desu

>>3680142
Welcome to tax law.

No one fully understands it, which is entirely the point.

>>3680153
Drumfkin better drop crypto taxes
OR ELSE

It doesn't even make sense that you have to pay taxes on trades between coins.. Here is why

You have and XYZ , It's worth $20,000 and you want to cash out.

1) You hold XYZ for and sell it for BTC
Taxable event and you pay taxes on the $20,000 you gained in BTC

2) You IMMEDIATELY sell the BTC for USD (because no way to sell the XYZ for USD)

You have to pay short term gains tax on the BTC.


So you have to pay taxes twice in the same day. Both Short term gain taxes ??

That makes ZERO sense

>>3680217
No, you would only get taxed once at the FMV of the token in USD at the time of the sale. This is how it works if you are treating these as if they were stocks.

>>3680242
>>3680217
So you would be taxed for the XYZ to BTC exchange, NOT the BTC to USD exchange because there was no gain in FMV at the time of your second sale.

(not tax advice retard.png)

>>3679989
>>Throw 100 bucks in coin x
>>It goes up 500%
>>30% taxes mean you owe $150 in taxes
>>Move coin x to coin z
>>Coin z nosedives and is only 25% of what you bought in at
>>You now only have 125 dollars
>>IRS apparently takes all of that and demands 25 dollars more

Not only that you now have to sell coin z to btc to get cash

Sell z to BTC = 30% TAX
Sell BTC to USD=30% Tax

so...
x to z=30% = $150
z to BTC=30% $25
BTC to USD=30% $25

You owe the IRS 200%

Have a nice day

I read somewhere that the irs would not subpoena coinbase accounts that had bought/sold less than 19k

NONE OF THIS MAKES SENSE

CAN'T I JUST WITHDRAW FROM COINBASE AND PAY THEM A CUT!?!?!??!!??!?!

>>3680258
No tard, the new instrument carries the fmv. So you owe $150 on the first trade but you claim the loss on the second one to offset.

>>3680242
>No, you would only get taxed once at the FMV
What is FMV ? Frosted Mini Wheats ?

>>3680280
Lots of people are only paying taxes when they cash out, but that is risky. The IRS hasn't officially said yet. They may come back later and demand past payments plus penalties for all token to token transactions, treating them basically like securities.

>>3680142
If you want real advice you should ask reddit.

>>3680303
Fair Market Value

Are all of you retarded? Do you think you aren't taxed on every stock trade? Why would cryptocurrencies be any different, especially using good goy exchanges like Goybase who gives all your records to the IRS?

>>3680365
but you sell each stock for USD. That's not what is happening in crypto.

Sometimes you are selling NEO for ETH and then to cash out you need to Sell ETH for BTC and BTC for USD..

3 transactions just to get to USD..

also since its considered property wouldn't we pay property tax instead of capital gains?

>>3680395
Same thing happens with forex idiot.

>>3680417
Gains on property sold is taxed as capital gains by the IRS. You're thinking of local property tax which is something else.

None of this makes any sense and we're not getting our money.

>>3680430
Crypto isnt considered a currency idiot

>>3680488
Have fun with Tyrequs the IRS collector at your door.

I'm convinced no one has ever cashed out judging by these replies. Jesus, we're all fucked.

>>3680430
So explain it instead of being a dick.

You think we all have traded Forex ? Saying , dur same things happens in forex means nothing. That's why OP made this thread.

So help or fuck off to your I'm so fucking superior neckbeard corner of the world. Calling people idiots is literally fag-tier.

Even over on Reedit the Bitcoin Tax forum says something COMPLETELY different than what you are saying and there are CPAs and lawyers in there.

>>3679472
You are taxed at every transaction, whether from Cypto to fiat or crypto to crypto.

>>3680488

>Notice 2014–21
>IRS Virtual Currency Guidance
>SECTION 1. PURPOSE
>This notice describes how existing general tax principles apply to transactions using virtual currency.

rut roh

>>3680528
So in your opinion If you sell XYZ to ETH (to get best trade price) then ETH to BTC to USD to cash out..

How many taxable events take place?

>>3679491
>as well as the purchase price of those units.
What if I got paid to post in BTC?

I made 30 BTC in 2011 in bitcointalk in the first sig campaigns and now im just holding until im rich, so i never bought shit. Its similar to mined BTC.. how the fuck does that work tax wise.

>>3680117
because somebody needs to pay for the gibsMeDats and capital gains is an easy target

>>3680556
You are completely fine until you sell it.

>>3680548
Who cares. The IRS isn't going after shitcoiners. Not now not ever.
They refuse to give clear guidance to scare reddit cucks into paying up.

Just pay when you cash out, most people don't even do that so you will be good.

>>3680537
Read the entire notice

How can the government know if you made profit on crypto currency? I thought it was all anonymous

>>3680574
This is what the CPAs on Reddit are saying
They are saying it's a "Like Kind" trade.

"Trading for Alts is a 1031 exchange with presumably no "boot"

>>3680556
Q–3: Must a taxpayer who receives virtual currency as payment for goods or services include in computing gross income the fair market value of the virtual currency?

A–3: Yes. A taxpayer who receives virtual currency as payment for goods or services must, in computing gross income, include the fair market value of the virtual currency, measured in U.S. dollars, as of the date that the virtual currency was received. See Publication 525, Taxable and Nontaxable Income, for more information on miscellaneous income from exchanges involving property or services.

>>3680565
that is not true. read the IRS guidance you fucking morons.

>>3680430
Not true.

Q–1: How is virtual currency treated for federal tax purposes?

A–1: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency.

Q–2: Is virtual currency treated as currency for purposes of determining whether a transaction results in foreign currency gain or loss under U.S. federal tax laws?

A–2: No. Under currently applicable law, virtual currency is not treated as currency that could generate foreign currency gain or loss for U.S. federal tax purposes.

>>3680603
Hope you're right. Personally I'm going to risk it and treat as like-kind. Just saying sometimes these IRS guys go back on their guidance.

>>3680603
To do a like kind change you have to fill out a tax paper. And its pretty complicated and probably does not apply to crypto. Just don't have your real name or address on exchanges and don't ever say you traded. Just pay when you cash out. No one will every know your trades.

>>3680611
So what is your opinion that people on REddit are saying, if you get paid in BTC you have to pay taxes on those gains..

If you trade BTC for ETH and "nothing more" there is no boot so there is no taxable event. It's a 1031 exchange.

https://en.wikipedia.org/wiki/Internal_Revenue_Code_section_1031#Section_1031_Like-Kind_Exchanges

>>3680629
>Just don't have your real name or address on exchanges

>>3680629
Ah they didn't say that. Jesus fucking death and taxes.. of course my name is on the bigger Exchanges..

See the problem here is this..
If you say live off of cash in the bank, and you trade and buy everything with BTC and haven't cashed out ever.. Where's the cash to pay for your gains ?

Can't pay the IRS in BTC. I've never made any cash from BTC at this point but I have made lots of GAINS over the year.

>>3679891

Eh...

If it's less than $10k I doubt you would do jail time.

But if you hid over $100k in money in a clear fraud, yes you could do time.

>>3679953

This.

My brother worked for the IRS for 2 years.

He said generally they go after high income individuals and businesses that are clearly committing tax fraud AND the IRS usually gets a tip because the suspect was noticed by other agencies as well.

>>3679472
With all this confusing shit on crypto taxes, it seems like the simplest option is to avoid taxes altogether, cash out using localbitcoins and don't set off any red flags with your moneyz

>>3679472
Use Bitcoin.tax you can import your records from Bittrex, Coinbase, etc. Change the tax rate to the tax bracket you're under and it will give you the amount that will be stole from you by the Gov.

>>3680671
Jesus what happens to the guy who transfers his gains to his home computer and loses his computer. I've seen tons of people lose a shit load of coins.

I saw a guy the other day lose around 11k Waves for real..

>>3680596
HOLY SHIT THIS IS THE LEVEL OF /BIZ/ USERS

>>3679929
thank you kind anon, I was wondering about this in another thread earlier tonight

>>3680727
You here to help or toot your superiority horn ?

If people don't know the answer, they don't know. I've seen ALL sorts of advice all over the net, none of it remotely the same.

Reddits take in their Bitcoin, Crypto and Bitcoin tax forums is 100% the opposite to here and there are many real to life bitcoin millionaires there.

>>3680645
Yeah, I agree with them. Based on that IRS guidance I just posted, it says you get taxed on BTC payments for services "at fair market value of the virtual currency, measured in U.S. dollars, as of the date that the virtual currency was received"

No taxes unless you make over 10k

>>3680769
So are you just going to pay taxes on your ultimate BTC>USD transactions ?

Not your XYZ>ETH>BTC>ETH>XYZ>ETH>BTC

>there are people who actually have to pay capital gains (((taxes)))
>mfw non dom UK citizen

>>3680781
So what if you made $0
but 50 BTC ?

Was planning on cashing out when I had enough to buy a house and the equivalent in of the house price in BTC

>>3680756
Based on all I've read, the most reasonable answer is you only pay taxes when you sell BTC in an exchange( or any where else) for USD, just like stocks . You don't pay taxes when you trade stock to stock only when you cash in for USD.

>>3680794
Yeah, it's converting property into USD so it's taxed as capital gains. I'm researching this stuff same as you, I just started this year. Looks like you need to attach a like-kind-exchange schedule as well though which will be a bitch, but no taxes.

>>3680814
That's Reddits collective take on it.
People here are saying that every BTC>ETH , ETH>RLC, BTC>Whatever sale is a taxable event.

so it seems like its either

a.) Pay tax on whatever you cash out into USD

or

B.) Pay taxes on every transaction

the world may never know *twilight zone theme*

>>3680645
Trading BTC to ETH is not a like-kind transaction.

>>3680814
That is incorrect, you get taxed for every trade. For example trading from BTC to ETH back to BTC and finally USD you will get taxed four times. Its complete shit but that is the law
Source: https://bitcoin.tax/faq

>>3680274
This is true right now, they may want to start goung for the lower amounts if this becomes more common

>>3680844
I've seen this argued on reddit more than the other take.
But really who cares which is true as long as altcoin taxes are unenforceable.

So basically we are all in 100% disagreement on whether to

1) Only Pay when you cashout BTC > USD
2) Two Taxable events on these trades XYZ>ETH>USD
3)Three Taxable events on these trades XYZ>ETH>USD

Yeah haven't seen any agreement on any forum on the net over this.. How fucked..

My kingdom for an edit button..

So basically we are all in 100% disagreement on whether to

1) Only Pay when you cashout BTC > USD
2) Two Taxable events on these trades XYZ>ETH>BTC>USD
3)Three Taxable events on these trades XYZ>ETH>BTC>USD

Yeah haven't seen any agreement on any forum on the net over this.. How fucked..

>>3680897
Pretty much yeah, nobody knows. Only thing that is certain is that IRS heebs will come to collect their money, and will try to collect as much as possible.

>>3680884
Yup why be clear when you can just be jewish and fuck people over with vague rules. We are gonna need the supreme court to tell the IRS what is acceptable and what isnt.

>>3680884
i think all the only taxable event is crypto > USD. doesnt make any sense to tax crypto > crypto, the US government doesn't control any crypto

>>3680897
The IRS HAS to clarify this for the upcoming taxseason, or be forced to post pink wojaks due to no one declaring this on their taxes.


I WANT to pay taxes and be squared away, but all the confusion makes it hard.

just reading through this thread I see about a dozen people who fucked up and are now worried BAHAHAHAHAHA

>>3680923
I'm in the same boat. I'm the guy that pays his taxes a day after I get my 1040s and have never taken any deduction that I am not 100% entitled to take.
I too want to pay my taxes but they are making this nuts. ALOT of people have made trillions of profitable trades this year..

You know what ? Just dawned on me..

Ameritrade sends me a 1040 every year.

Is Bittrex and Poloniex going to send me one ?
They have to have some culpability here no ?

>>3680971
Nope, they aren't going to send you shit. They are going to say it's your responsibility to report.

The bottom line is I'm not reporting until I cash out in USD

>>3680859
>https://bitcoin.tax/faq
>What about if I bought some Ethereum or Dogecoins?
>Potentially another tax event. Think of it as selling Bitcoins back to cash, then buying your other coins with that. That sale might have gains, and so is treated the same way.
>...Potentially...
Notice that word "Potentially." Their source on all this is the IRS guidance I posted earlier, which says to treat virtual currency like property. And like I said, maybe the IRS will treat crypto-to-crypto as a taxable event one day, but there's no evidence of that yet and the guidance seems to indicate it's a like kind exchange. If you want to be extra conservative you can go ahead and treat it all as taxable. I'm going to risk it personally, but I'm giving no tax advice in this thread.

>>3680985
Well there has to be some law that says that Ameritrade has to send you a 1040 no ? Otherwise, why would they bother ?

Do crypto exchanges fall under the same rules ?
If not, where is the list I am supposed to get on my total $ amount of taxable trades like on Ameritrade ?

>>3681018
>Do crypto exchanges fall under the same rules ?
Nope. They provide you a list of transactions as a convenience and offer you no tax advice. You're on your own.

>>3681018
why would a crypto cater to the laws of what like 160 nations?

ITS DECENTRALIZED CURRENCY

Can I just hold tethercoin if I want USD without having to pay taxes?

Alright guys, how the fuck do you keep track of spending and calculate profit on crypto?
Obviously if it's pay when you cash out its pretty simple just keep records of how much capital you've put in.
But if it's every transaction? You'd need to have recorded every single trade and it's transaction fee? Surely daytraders would need to have a system for this?

>>3679989
You can always offset gains with losses. Since your net gain for that year is only $25, you'd have to only pay tax on that $25.

http://fortune.com/2017/03/19/irs-bitcoin-lawsuit/

>>3679472
>tax time comes around
>go to all the exchanges you use
>print out the papers each exchange gives you, with a list of all the trades you've ever made
>give the papers to the guy who's helping you do your taxes
Really hope you guys are having your taxes professionally done. This shit is tedious to do by yourself. With a tax professional, you at least have a guarantee that there are no screw-ups and they can take the blame if you get audited by the IRS.

>>3681106
>Only 802 People Told the IRS About Bitcoin—Lawsuit
IRS BTFO

>>3680611
kys cuck

Even if you have to treat every trade as a taxable event, the issue NOT that you could potentially owe more in taxes than you profited, the issue is the logistical nightmare of keeping track of everything.

For example, If you bought 5k USD worth of BTC on an exchange, and did say 6 trades between coins in a year for the sake of simplicity, and at the end of the year have 30k USD worth of BTC, then you would be taxed on the cumulative gain of 20k.

Say it looks like this

Trade 0. Send 5k USD to exchange and buy 5k worth of bitcoin
Trade 1. 5k USD/BTC traded for Doge Coin
Trade 2. Doge Coin traded back to BTC valued at 15k Profit: 10,000 USD
Trade 3. 15k USD/BTC traded for BitBean
Trade 4. Bitbean traded back to BTC valued at 40k Profit: 25,000 USD
Trade 5. 40k USD/BTC traded for Pot Coin
Trade 6. Pot Coin traded back to BTC valued at 30k Loss: 10,000 USD
When you report your taxes, you report every transaction during the fiscal year and the associated profit and loss, and then you add each of your profit and losses together to find your net profit or loss for all trades for the entire year. The net is what you are taxed on. In the above example you would be taxed on 25k in gains, NOT on 35k in gains. The IRS DOESN'T only tax your profit from each trade and ignore taxes on your losses from each trade.

It's cumulative. The issue is simply keeping track of everything, which is why for simplicity some people wish to only report when they finally take USD off an exchange back into their bank account.

>>3680988
agreed with this

keep it simple

>>3679531
its this you fucking retards, crypto is not an investment untill you have made a profit in fiat, the price of bitcoin goes up and down but its meaningless if you keep it all in bitcoin, they are not captial gains untill you actually turn it into fiat

>>3680611
So I got my BTC as payment for posting on an internet forum and I didn't report shit and will not report shit until they are worth 2 million dollars in 2027. What the fuck are they going to do?

I always used VPN/Tor and any tax crimes would have expired by then anyway so I will just pay capital gains. Lol cucks.

>government doesnt recognize crypto as a currency
>but people are still willing to roll over for irs and give up more money out of fear
Most cucked nation on earth.

>>3680217
>7
it doesnt make sense but u "have" to. IRS has bad laws about this but for now this is what you have to do. Sucks balls but better than going to fucking jail for not paying 70 bucks

>>3680988

why the fuck is this so controversial. there has to be one person here's who's talked to an accountant and has actually had their taxes done

>>3679472
they don't fuck the government

>>3680844
this is retarded

>>3681306
can someone explain this whole going to jail thing. lets say you pay taxes only on cashing out to fiat. irs takes notice of you and says hey actually we wanted you to pay taxes on crypto to crypto transactions.
you dont get the chance to pay up on it at that point without going to jail?

>>3681306
Im not paying shit, not to mention I did trades on dead exchanges like cryptsy and mintpal, so I dont have the data, and even if I did, what stops me from faking it? they can't check shit because the exchanges are dead.

Anyway I never bought BTC, I got paid so there is not traces to my real identity attached to my bank details.

Currently im still working for BTC for other tasks and im not reporting shit, im going to hold 10 years and by then im sure any crimes would have expired anyway. Fuck a cuck.

>>3681172
then it crashes to 900 on jan 1, btc has no "market value" it is just data that lives on your computer that can be destroyed at any time...it has no value whatsoever untill it turns into USD

>>3681282
nigga have you seen the american prison documentaries on youtube. There is no fucking way im ever going to prison before i kms. This isnt like sweden where prison is literally a hotel.

>>3681281
>any tax crimes would have expired by then anyway
tax fraud crimes never expire.

>>3681327
Because the IRS has issued no guidance on it ever. It's controversial because the authority on the matter refuses to take a stance.

>>3681327
my H&R block guy is a HS soccer coach for his full time job. he's normie AF he didn't even know what an ico was

>>3681105
Why go through all the bullshit of reporting everything than if in the end it doesn't fucking matter?

>>3681484
Because you can hold on to the coins for years and the IRS wants their cash NOW

>>3681475
this post is gold

it's the same as any other capital gains...

if you trade forex and make gains, the tax is applied when you get out of the trade & back into USD.
you can trade between different cryptos ad infintum,, if you keep it all in crypto you don't have to pay taxes since there is no capital gains. taxes are only applied on net gains, if you lost more than you won then you don't pay any.

You don't pay taxes on gold you own.
You don't pay taxes on magic cards you own.
>b-but doesn't that mean crypto fags pay no taxes?
No, crypto fags paid 2% to buy into crypto at coinbase, who pays business taxes

>b-but can't I just put all my money crypto, watch it grow 100x and pay no taxes on it ever?
if crypto ends up being accepted, the IRS will just make the businesses pay sales tax, same as always

>>3681475
Get a real cap please

>>3681556
Cpa

>>3681556
he means cpa or he's retarded

>>3680715
This, you fucking dipshits. There is automated shit to do this for you.

/biz/ is so fucking retarded sometimes I swear

>>3681553
this.

You don't pay until you convert to fiat, because you have no fiat to pay taxes if you haven't converted. /thread

>>3681577
sometimes?

>>3681351
No, you're not going to jail if you made a "good faith effort" and tried to pay your taxes the correct way.

Personally I'm not sold on the whole paying taxes on every trade thing. It's complete bullshit. There's basically no regulation on any of these exchanges, people have been losing their trade history from dead exchanges etc. IRS has made no rule with the weight of law on this shit, they just made a best guess for people who were pressing them. They have NO idea what they fuck they're doing when it comes to crypto. Fucking idiots. Fuck the IRS. I hope Trump abolishes the fuckers.

All that said, I will be using Bitcoin.tax when I need to pay tax, and upload my trading history from bittrex/coinbase, and just let them automate this shit for me. Easy.

>>3680781
If you're day trading, and don't have another job, this is considered self employment. If you make over $400 you have to pay taxes, apparently.

And then it comes down to whether you have to pay when you cash out, or pay on every trade.

Fucking bullshit, huh?