/biz/ - Business & Finance

>>7365348
btw in my opinion, this is exactly what caused the crash. there were a lot of people like me, who would have to cash out to pay capital gains. this resulted in basically a bank run in crypto, and now there are many people left like myself unable to foot the bill.

kneepads

Well the problem is that you are an idiot, if you are really thinking of cashing out for jewmoney you shouldnt be in crypto in the first place, so im glad an idiot like you now has to pay huge taxes to his jewlords :) bye

don't pay your taxes retard

Oh yea, the tip: never, never cash out.

>>7365348

Talk to the IRS and arrange a payment plan lik the loser you are.

How did you trigger a taxable event so large it outstrips all of your assets, but you have no cash or saleable assets to pay for it?

It's highly unlikely you owe any capital gains tax unless the gains were realized as USD.

So many people on this board think they owe taxes they don't.

>>7365504
>>7365524
>>7365527
>>7365567
i didn't cash out. i thought i have to pay capital gains on the increase in value, even if i don't cash out.

>>7365649
You're a fucking idiot. And yes, probably there are many others like you

>>7365348
The IRS collects taxes illegally. Write them a letter and tell them to go fuck themselves and everything will be alright because they can't do anything about it.

>>7365649

How fucking stupid are you? Jesus fucking Christ did you consider googling “capital tax explained to people educated in Mississippi”?

you dont owe shit unless you cash out

>>7365649
Only crypto-to-crypto or crypto-to-anything-else is taxed. If you just bought some coins and held, and they've increased in value, you do not pay any taxes yet. You DO pay taxes, however, when you trade for anything else or cash out. This is accurate for US residents. Crypto day traders get pretty rekt, though.

>>7365348
Op what exchanges are you using? And are you fully verified?

If you are making your gains purely on offshore exchanges your chance of them cooperating with US gov is far less.

But even if you dont want to avoid claiming the gains what you could do is burn all your coins and say you were hacked in dec and lost control of your trading account and the hacker seized all your coins, effectively a full loss. Or you could sell and claim you sold in 2017 and lie your way through it. Scrub as much info as you can, delete accounts, delete wallets, lose keys, and say fuck it.

yeah my advice is investment money is for something expendable you know you can cover, so next time don't be stupid with your money

>>7365649
Thats not how it works LMAO

>>7365649
fucking retarded if you don't know how taxes work.


Just pay taxes on the final cash out and fuck everything else.

>>7365649
My dude I can help you out with this, easily. I'll keep your bill low for only a small fee

>>7365649
>>7365873
LONG TERM CAPITAL GAINS TAX FAGGOTS DO YOU SPEAK IT? 365 DAYS = LONG TERM TAX

>>7365649
No. It may affect the final tax bill when you DO cash out but it's offsettable by the losses. You have nothing to worry about.

>>7365514
This, im 5k in loss and will fucking tell the taxation office to go fuck themselves and send them my 10000 transaction log stating 5k loss.

>>7365348
What the fuck are they gonna do if there's nothing in your bank account? If they hit you with a big bill you can't afford, declare bankruptcy.

Op were you trading? Or just held coins the whole time? If you traded yeah you owe capital gains anytime you sold a coin. Best option is to just hold, and pray to kek that by the time April rolls around we have recovered some. Even then, you can put it off longer and file for an extension. How much do you owe?

>>7365773

This is the reason America is in the shitter. Citizens of the country don't even understand their own bureaucracy.

inb4 MUH PUBLIC SCHOOL EDUMACATION

>>7366271
i traded a quite a lot. enough to not afford capital gains on the trades.

>>7365649

>>7365649
So fucking retarded. You pay capital gains tax when you REALIZE GAINS. if your internet space money goes to 0 you owe zero, idiot.
if it goes to 1Milllion you owe the cap on that amount when you cash out. holy fuck why is this so fucking hard for people to understand. You can do the same thing if you are casually day trading, you pay taxes on the INCOME YOU EARN, so your initial investment is free of tax, but the profits you earn churning/pumping/moving your positions is what is taxed. No, you dont have to fucking sift through every trade you made on binance.

The Irs is not that fucking retarded. It's a pretty simple equation folks
Did your total amount of fiat/wealth increase? pay tax on that increase. Fuck you guys are retarded.

>>7366426
i thought crypto-crypto trades were taxable events.

>>7365649
also the longer you dont pay, they add interest which compounds daily. Pay your taxes go- err guy

>>7366484
AAAAAAAAAAAAAAAAAAAGH THAT DOESNT FUCKING MATTER!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

im jk op i'll be nice

so its actually pretty simple, if you are day-trading, and it accounts for more than 50% of your total income, then that is income tax
(in US which i assume u are in)
so pay based on your tax bracket.
if you're playing around here and there and moving positions actively but not all day, that's captial gains and it taxed as such.
The only thing that really matters is
did you make money? then pay your tax on it.
so if your btc is worth less than you traded it up to/bought it for you dont owe.

>>7365649
AAAHHAHAHAHAHA

>>7366484
https://www.reddit.com/r/Bitcoin/comments/1uccfz/i_am_a_tax_attorney_here_are_my_answers_to_the/
https://www.reddit.com/r/CryptoCurrency/comments/7m56g0/the_absolute_fucking_impossibility_of_reporting/

>>7366484

OP i'd like to thank you for your sacrifice because i didn't understand shit either. while all of the harsh posts apply to me too they aren't directly at me

>>7366345
damn that really sucks. you might want to hire a tax attorney and try to get him to sign off on a letter that let's you use the like-kind exemption, which could cut your tax bill in half. 2017 is still sort of a gray area so it could work

>>7365773
Holy shit that was legitimately funny. Thanks anon

>>7366738
>>7366607
>>7366426
>>7366400
>>7366078
>>7366020
>>7366283
>>7366171
>>7365822
>>7365773
>>7365684
>>7365567
>>7365762
>>7365514
Posting in a brainlet thread

>>7366096
kik?

>>7365649
Umm. No.

>>7366484
Yes that apply when you cash out

>>7367481
can you cite that?

>>7367481
no it applies to every trade dumbass. stop spreading misinformation

>>7365348
I'm about in the same position, would have to liquidate whatever I have left to pay taxes and would end up in a pile of shit.

in the US, you can file for a tax extension. I'm not sure what the paperwork is, but it moves your payment date into the future. unfourtunatly this means that you'll have too pay even more next time around, but you have time for your assets to appreciate again. Unfourtunatly if you wind up with mostly short term gains from your assets because you haven't held for over a year, you pay capital gains tax again.

so if you start with 10k, make it to 90k, you own about 5k plus 25% of about 55k so about 19k in short term capital gains assuming that is your sole source of income, you then crash back to 10k at the start of the next year, meaning you now owe more that you have. you can extend a certain amount (idk exactly what).
just remember, that if your holdings then go back up to 90k, and they classify as short term gains again (because you've been trading)
you now have to pay the 19k back taxes, and another 19k for that years tax cycle. you can deduct realized losses at a rate of 3k per year, and extend losses into the future enabling you to deduct another 3k of losses each year until all realized losses are accounted for. however, that still sucks because if you realized 30k of net losses, that will take 10 years to get back from your taxes and that is assuming you never have another realized capital loss.

basically, it is out and out theft. you pay money, even if you never got to see a penny of real world profit, the IRS rapes you, and then tells you it will "forgive" your losses because you're such a worthless fuckup at a rate of 3k per year, so, too bad, serves you right for trying to become successful and putting money into a new market to spur a technological revolution.

of course I'm not a tax attorney, so don't take this as truth, but from what I've read this is what we're left with. consult an actual crypto tax attorney

>>7367613
Yes, but you only pay this on liquidation. If you don't cash out, you do not have to pay crypto to crypto trades, since you only make value, not actual realised gains you lemon. Value and gains are separate

>>7367704
cite your source

>>7367740
Why do I need a source to say gains and value are not the same Thing? Use your head

>>7367740
Realised gains, to clarify. That is what CGT is on

i dont even know how to respond to the ignorance of op or this thread.

you cant pay for what you never had dumbass. example 100k in btc- goes to 10k in btc. you don't owe 90k in btc that doesnt exist. you would end up paying cap gains for the 30%~ you eventually take out if its actually profit.

>>7365649
Funnily enough that's how it works in the Netherlands. You have to pay 1.2% of what you OWN valued at abstract prices.
Every time I see some Dutch anon boasting that they pay 'only' 1.2% I laugh. Wealth tax is the worst possible tax in the world.

>>7365649
.t tax shill

>>7367645
You're not understanding this. Google unrealized gains tax. Try to find a single thing that says an unrealized gain for assets can be taxed.

It can only be taxed if you sell. Yes even crypto to crypto trades.

>>7365527
>be me
>invest 4.5k of my 5k life savings left over as a USA college fag
> make 50k total profit, but from trading, not from "le hodl meme"
>didn't cash out
>owe something in the range of 11k and 18k in taxes
>market divebombs
>left with total of 25k in crypto assets,
>fuck
and there are some people that were hit hard enough in the crash that they wound up with less than what they owed in taxes, now I get to deduct 3k capital losses for the next 10 years in order to get back the taxes I paid on the 50k that turned to 20k in a month, but who gives a shit because I either have to liquidate to pay taxes and miss the natural growth that comes after the bubble (like dot com) or file an extension and accumulate tax debt. long story short, I try to make money, don't actually make money guberment doesn't give a shit claims I am ow in debt to them even though I didn't actually make the amount they are claiming.

oh look another one sucked into the machine that is government and debt slavery. ironically enough, the whole reason he did any of this was a chance to give himself a head start in being a good little responsible citizen and attempting to become financially independent, which would give the government another nice dependable source of income to leech off of instead of those lower class shits that constantly default on their debt. so even though it's in the government's best interest for people to become financially independent and then comply with regulations and become a super dependable source of tax revenue, they say fuck that, he's probably another one of those irresponsible lower income leeches that's too stupid to do shit, so lets suck him dry while we can in order to minimize the assumed loss from him defaulting on later debt.

and thus we chug along

>>7368040
This larping is getting old

>>7367704
>you only pay this on liquidation
hahaha holy shit. i can't tell if you're trolling or if you genuinely believe this.

you owe taxes on crypto-to-crypto. period. there is no if or but. you're supposed to set aside money for taxes when you trade, sell, or buy anything with crypto

find me a source that says otherwise. i bet you can't because you're just pulling things out of your ass

>>7367998
maybe you can get away with claiming crypto to crypto is like kind and therefor unrealized, but that is standing on some thin ice there bud.
and that only counts up to 2017 if it counts at all.

so either pay taxes on all taxable events which means every trade of any kind, or try and weasel out with like kind trades and hope you don't get assfucked in an audit at some later dare.

either way, if you were trading the big cryptos like eth, ltc, btc and a few others, there a fair chance you were doing it with usd pairs so for the most traded pairs, you triggered taxable events with every fiat to crypto trade anyway,

the US criminaly assfucks people when it comes to crypto, and they do it out of their own sheer stupidity because they don't know what to classify crypto currency as so they classify it as whatever the fuck they want because who cares, it's only the taxpayer that gets shafted, not the government, and hey the ambiguity even works out in the government's favor because we get to collect more tax revenue on it YAY!

>>7368185
this is the actual situation I'm in, and I'm pissed

>invest a total of 14k last year july
>extremely shitty at trading and only manage to be up to 27k on jan 1st
>currently at 12800$
I have less money now than i did in august.
This crash is just going to make 1000s of people not pay their taxes
fuck the irs

>>7367704
here's a source that backs me up

https://cryptocurrencyfacts.com/2017/12/30/the-tax-rules-for-crypto-in-the-u-s-simplified/

>You don’t realize gains until you trade, use, or sell your crypto.
>You owe taxes when you sell, trade, or use forked coins or coins you mined.

>>7366669
OP here. this was the most useful info in the thread.

to everyone calling me a brainlet, fine, i am a brainlet. but the like-kind exchange argument is still complicated and seems to imply that whether a crypto-crypto trade is taxable depends on whether you trade a security token to a utility or vice versa.

regardless, crypto taxes are a fucking mess. i guess i will talk to an accountant, but i highly doubt they will be much help.

>>7368465
Think about the way this is phrased a minute. If I trade 1BTC when it was, lets say $10000 for 10000 ShitCoin, when ShitCoin's market value is 10000 ShitCoin for 1BTC (so each ShitCoin is $1) how much tax do I pay on this taxable event?

How much have I earned in value from that trade?

Guess what, fucking nothing. Crypto to crypto trades aren't taxable unless you pay above market price for whatever reason. If you use a reputable exchange, at the time, there was no value increase.

>>7365649
Why do people believe this? I thought the "gonna kill myself cuz taxes" was a meme

>>7366283
>>7368684
you aren't a brainlet, this a failure of government, not a failure of the individual to follow government regulations

using advanced techniques to study how easy it is to understand certain language (SMOG readability scores), american legislature, and the tax code were ranked at such a high difficulty of comprehension that only a very select few people intelligent people who study it intensively can understand it. combined with the profusion of codes and documentation around this subject and you are left with the only conclusion that a governing body perpetuated itself and grew large enough to obfuscate the codes by which it ran the country in it's own self interest of self perpetuation and growth.

I saw a good video explaining this obfuscation of language to get these 1000 page bills passed and some of the people they talked to admitted using it as a tool to get things passed that were favorable to whichever special interest lobbied harder or had deep enough pockets.

if you've seen bojak horseman, t's like in that episode where in order to pass a bill, a useless clause to build a bridge to hawaii was forced in by some special interest group. it's the same idea

>>7368786
because i traded. i was making trades at least every week. ultimately almost all of my profit is taxable.

>>7368815
>you aren't a brainlet, this a failure of government, not a failure of the individual to follow government regulations
>using advanced techniques to study how easy it is to understand certain language (SMOG readability scores), american legislature, and the tax code were ranked at such a high difficulty of comprehension that only a very select few people intelligent people who study it intensively can understand it. combined with the profusion of codes and documentation around this subject and you are left with the only conclusion that a governing body perpetuated itself and grew large enough to obfuscate the codes by which it ran the country in it's own self interest of self perpetuation and growth.
>I saw a good video explaining this obfuscation of language to get these 1000 page bills passed and some of the people they talked to admitted using it as a tool to get things passed that were favorable to whichever special interest lobbied harder or had deep enough pockets.

>>7368815
i was too embarrassed to admit this, but i was an advanced certified tax prep for a volunteer center. the forms were mostly simple. but i agree that it's basically criminal to expect a person of average intelligence to understand the tax code in itself.

one of the reasons i got involved in crypto was that i want to see the government forced to move to a sales tax, instead of manipulating voters with 'tax benefits' that are incomprehensible to them.

>>7368694
> If I trade 1BTC when it was, lets say $10000 for 10000 ShitCoin, when ShitCoin's market value is 10000 ShitCoin for 1BTC (so each ShitCoin is $1) how much tax do I pay on this taxable event?

You pay taxes on whatever you gained. That's why it's called capital gains tax. It doesn't matter if you trade it for shitcoins or pineapples. If you bought the 1BTC at 1000 and traded it for something else at 10,000 you owe taxes on 9000.

>>7368952
>>7368933

the forms themselves aren't so bad, and you can always air on the side of caution, and there is inbuilt forgiveness in the form of tax refunds, however, in the attempt to properly define and categorize all the aspects of wealth transfer which inherently can't be perfectly categorized, you ind up with over complex and hard to understand regulations.

the legislature behind the decisions is absurd. the issue with crypto is that the US didn't know how to define it. you could define it as a currency which would make trading like forex trading, but is it a security? or an asset? or a utility because there are utility tokens? are they similar enough to qualify for like kind trading? in the case of a currency does appreciation count as income? would holding a lot of physical dollars/ fiat require extra taxes paid if the dollar increased in value?
so all these questions pop up and the inability to fit it into a nice neat box combined with inherent greed of a government wanting to get a piece of everything leads to uncertainty, and uncertainty leads to inefficient systems, which isn't a big deal for the govt because they're the govt, but its a big deal for the individual who by law has to support such an inefficient behemoth

of course, this is the main point/argument of libertarians and small government advocates. and it makes sense in certain areas, unfourtunatly if you have some kind of incentive or think you have some kind incentive for expanding the govt then you will think this is terrible, but its easier to differ responsibility for your life to the government instead of taking it upon yourself because it IS hard

>>7368684
NP op just remember if you made money, pay taxes on the FIAT that you made.

when you "realize" gains, pay the tax on those realized gains.

again
daytrading = crypto >51% of your income and intentionally trying to ride waves, pump/dumps etc shorting/longing w/ leverage etc.
captial gains = holding long term or only moving with research.

>>7368694
Yeah, but the gains you make in a year on crypto are relevant since you can buy things with them.

>>7368952
Also I agree a flat tax is the only solution in the end.

>>7369085
That is completely wrong and you should feel bad for spreading this misinformation.

>>7369262
>>7368952
I also think using primarily sales tax or VAT tax is a better system, but good luck overhauling everything

>>7368446
It also makes you look like an entitled fuck that can't take a loss.

>>7369154
i agree. ultimately it was my fault that i now owe more than i'm worth to the government. i just can't believe it. i don't know how i'll pay it off. my job pays very little, it would take me literally decades of full-time wageslaving to pay off what i owe. i guess i'm just in shock. i can't understand how i can lose everything by making a huge profit.

>>7369369
again, you're only actually going to owe money if you actually made money, it's not that convoluted.

>>7369369
If youre not one yourself, there are a bunch of people on this thread trying to make you scared. What you say is not the case. If you never cashed out, then you've never made REALISED gains.

>>7369369

me too, I know I'm not completely fucked but I went from thinking I set myself up for a pretty sweet and safe start into working life to thinking I'm going to enter the job market with debt that I wouldn't have otherwise had, and such a big missed opportunity of holding what crypto I have left

>>7369323
I am a senior in college in the US that started the year with about 5k to my name.

the difference between ending the year with 5k, 10k because of taxes, or 25k is absolutely huge for someone just entering adult life/the job market, and if you don't see how big of an impact the difference in those three starting points can make, well then I don't know what else to say

lmfao at the people thinking you only pay when you cash out. The second you trade crypto for another crypto you 'realize gains' as far as the IRS concerned. You're going to be so fucked next year.

>>7365773
Underrated post.

>>7369464
The extra taxes are only APPLIED at cash out. I'm not saying they don't exist, but they do not need paying until you make realised gains on your assets (including crypto). This is literally the way capital gains have ever worked since the beginning of the concept of CGT.

And hypothetically, even if they weren't in your magical world, you could still offset the loss.

>>7368040

Have you considered putting the money you owe to the government (ya know, when ya make mad gainz) aside for safe keeping, rather than gambling it like a degenerate? This is literally how major companies operate all over the world.

You aren’t enslaved by corporations, taxation or the government - you are enslaved by your lack of forethought, addiction to gambling and general lack of financial literacy. The fact you can’t nail down your tax liability to a figure with less than 30% error (despite pretty specific numbers) only shows how ill equipped you are for this. I know you are a college student, but for fucks sake - people go to war and die younger than you. Take some fucking responsibility.

Also - do burgertards really pay 36% CGT? That is fucking Norway tier. At that rate you should use a shell company as the tax rate is lower, and you can claim expenses agains gainz.

>>7369681
CGT percentage depends on your total income, and if short term capital gains count as income, it sucks.

I've never had a high enough income to even have to pay taxes up until this point. additionally there is a sever shortage of information and tools to help calculate all your various trades in crypto markets, especially crypto to crypto trades if you need to figure out the cost basis in fiat at the time of the trade.

I did take a few thousand out, and I know I'm still responsible, but when you go from never having enough income to even file taxes to suddenly sitting on over 50k of assets, shit goes to your head, and if you haven't meticulously planned out what all the implications of this change is, yeah you'll run into issues.
I wouldn't consider myself a degenerate gambler with this stuff, yeah there is a super steep learning curve and I've made shit tons of mistakes along the way, but I'm still up nicely from where I started. the issue is timing, that I got into the market less than a year ago, and any and all transactions I make are taxable, and that tax rate changes based on what the market does. so in order to perfectly plan everything out, you have to know what the market is going to do so you know how much you are going to make or lose and therefore what your taxes will be like, which only happens in fairy tales.
and what do you think I'm doing now trying to figure this all out? I'm trying to take responsibility for all this and do the best I can, but if you ask me, it's ridiculous that this situation has arisen to this widespread an extent in the first place

>>7369681
and one last thing, how I am enslaved to my own financial/regulatory illiteracy when the regulations and the system is imposed on me?

>>7369928

The issue isn’t timing or information it is lack of planning. If you literally can not convert your holdings to USD then neither can Uncle Sam. Well, I take that back. You don’t seem like the brightest tool in the shed, so it’s quite possible that you can’t but the IRS can.

You wanna be a big dog? Then play like the big dogs play. Anyone with money, anyone in finance, and anyone that runs a business has had to do deal with this - quit whining about “muh fairy tales”. Millenial fuckwits like yourself are so used to having things handed to you on a plate you can’t fucking think for yourselves.

When you make a trade that earns you money, calculate your liabilities, make a record of it. Once a month, check that you have enough cash to cover this liability. If you have ever had a job, someone at your company (or at any large company) in a senior position was tasked with this job. If they fucked it up, the company goes bankrupt and everybody goes on welfare. I have literally met people who do this at a national scale, including one person that controlled 11% of the GDP of a SE Asian country. And if he was a bitch like you are being right now that country would be in real deep shit.

It’s not hard - you we’re smart enough to be accepted into community college so surely you can research this and protect yourself. My employer is a $350mm/pa company (not big, but not small) and the GM who’s job it is to make sure the dollars keep going to the right places is a fucking ex-tradie with no other qualifications who leads a team of accountants. If he can do it - and he does - then surely you can do it for 50k per year.

>>7370038

You are a fucking cuck. You have been sucking on society’s teat for so long, you don’t realise that you need to help put the milk in or everyone goes hungry. The rules are what make our society, without them we are just animals - not even good ones like wolves or bees, more like insects. The rules gave you roads, police, education. It enabled your parents to get jobs and support a useless, whiny millenial soyboy in the hopes that he too, will join society.

I started from nothing. My parents weren’t rich or well connected. I worked hard at school, I fought for jobs, worked my ass off at them, and looked after my personal finances from the second I left home (which was while I was studying). I am only maybe 10-15 years older than you, but somehow I have a stable life that doesn’t depend on either my day job or my investments, and I didn’t need to whine about how muh wageslavery kept me down.

If you want to live in a libertarian paradise, do go to Sudan or Somalia. Otherwise, be a part of the society that has given you everything.

>>7369681
>>7370310
>>7370498
Damn dude

>>7365649
I'm afraid you are not going to make it my man

Why do you guys need to pay taxes when you've lost money?

>>7365389
>pay capital gains
oh man you people are fun to take money from

>>7371339
because they made money in 2017 and owe taxes for 2017

>>7370498
Damn fucking straight anon. Be responsible, contribute to society and play by the fucking rules or you dont get to have an opinion.

>>7370498
>blublublblbub i r a big goi dat noe his stuffs so i type at you liek a dumdum on dee internetz

>>7370498
>the absolute state of Platonians
Diogenes won the day Plato opened his retarded mouth

>>7370498
I want to add to this: Who creates the rules? If man creates the rules is he man? For without rules man can exist but without man rules cannot exist. How can you separate man from the rules if the rules cannot exist without man. Rules, therefore, must always have man. Rules are simply inventions. No different than any thought. The physical world is not altered by thought but by action. Action is dictated by thought but without action, thought is meaningless. Therefore, without action rules mean nothing and action is above rule. Actions are what create society. I have heard very little from you on the thoughts necessary for action to occur. Are you the farmer who grows the "milk"? Are you the metal worker who makes the farmer's tools? Are you a builder? A craftsman? What about the physical world do you have domain? Finance? Spooks of the mind? You enslave yourself to others and beckon for your brother to do the same. How funny.

>>7365348
you dont understand how crypto is taxed faggot.

>you only pay gains taxes on crypto when cashing out to fiat.
>you ONLY pay taxes on crypto when converting to fiat.

>>7365348
Capture stray cats and sell them as rare cats by painting them. This is what I did for 2 years and made 31000$

>>7370498
>>7371448
good goys

>>7365389

no the credit card bans caused the crash. the 2017 bull market was caused by normies maxing out their credit cards on coinbase

>>7367704

wrong. if this were true you could just:

>buy a baseball card for cash
>exchange the baseball card for crypto
>day trade the crypto
>exchange crypto for a baseball card a year later
>se

>>7368402

CPA here. it does not work like this. you need to keep track of the gains on each of your trades versus USD

>>7372678

>sell the baseball card
>claim it is a long term capital gain

>>7372713
So, uhh, please tell me it's the value in USD at the time of the trade. Otherwise, I'm royally fucked.

>>7372764

obviously it is your basis at the time of the trade

>>7368040
I don't get it. You held you didn't trade for other ceypto and you didn't cash out why are you paying taxes on unrealized gains?

There are lost of stupid faggot in this thread.
How about NOT REPORTING YOUR GAINS, CRYPTO IS UNTRACEABLE UNLESS YOU CASH OUT

ITT: Nobody knows what they're talking about
There's zero chance you owe more taxes than your assets(yes, coins are assets) are worth. This is why it's called capital *GAINS*. If your assets DECREASED in value, you can actually:
A) Deduct these losses from other capital gains, offsetting your tax burden
B) Deduct these losses against your income for up to $3000

>What is a capital loss?
A capital loss is a loss on the sale of a capital asset such as a stock, bond, mutual fund or real estate. As with capital gains, capital losses are divided by the calendar into short- and long-term losses.

These rules exist because if you had no tax protection against bad investments, nobody would ever invest anything and we'd all just store cash in our mattress.

>Can I deduct my capital losses?
>Yes, but there are limits. Losses on your investments are first used to offset capital gains of the same type. So short-term losses are first deducted against short-term gains, and long-term losses are deducted against long-term gains. Net losses of either type can then be deducted against the other kind of gain. So, for example, if you have $2,000 of short-term loss and only $1,000 of short-term gain, the net $1,000 short-term loss can be deducted against your net long-term gain (assuming you have one). If you have an overall net capital loss for the year, you can deduct up to $3,000 of that loss against other kinds of income, including your salary and interest income, for example. Any excess net capital loss can be carried over to subsequent years to be deducted against capital gains and against up to $3,000 of other kinds of income. If you use married filing separate filing status, however, the annual net capital loss deduction limit is only $1,500.

>>7372853
>untraceable unless you cash out

What good is this funny money if you never cash out? Gains are only worth anything if it's in REAL WORLD CURRENCY or REAL WORLD ASSETS

>>7372713

Fuck that, no you don't. You buy in $1000, day trade it all year up to $10000, then back to $1000. You pay 0 tax

>>7373031
>What good is this funny money if you never cash out?
The good thing is, if you break even or only make small gains, you don't have to pay taxes at all.

How are there people in here arguing about something that seems so vital but no one can cite the relevant tax codes to support their argument

>>7373088
This is wrong, you need to report every trade, because coins are individual assets. Yes your tax burden will be based on the NET capital gain. However under this scenario:
>you buy 1 BTC with cash (the IRS knows this)
>you trade 1 BTC for XVG
>XVG moons to $60000 and you go to Lamboland
>you trade your XVG back for BTC
>you cash out 1 BTC (the IRS knows this)

You will not pay any capital gains(YET) because the IRS can only see the 1 BTC that you cashed out, hence no gain. But, you still owe millions in capital gains from the XVG -> BTC trade, because your assets gained value, and the USA taxes asset trades on an individual basis. Now, the IRS can't really KNOW that you own all those new BTC, but when you EVENTUALLY want to turn those BTC into real, tangible cash, you will have to pay taxes, or risk going to federal pound-me-in-the-ass prison for not correctly reporting your individual trades.

>>7365423
>>7365504
>>7365514
>>7365524
>>7365527
>>7365567

based green IDs in row.. is this illuminati

>>7365649
You do IF you realized that value in FAIR MARKET VALUE by trading crypto to crypto.

>>7373262
Here you go, anon.

>According to the Notice 2014-21 from the IRS, "virtual currency is treated as property for US federal tax purposes." This means that transactions on digital properties like cryptocurrencies can be taxed as well. To the IRS, it seems that Bitcoin is a capital asset which can be subject to short-term capital gains (if sold after less than a year) or long-term capital gains if sold for a longer duration. The tax rate will be 15-20% based on the value as determined by the fair market price.

https://www.investopedia.com/news/irs-eyes-profits-bitcoin-and-bitcoin-cash-investments/

ALSO, FOR YOU PEOPLE WORRIED ABOUT TAXES ON 2017 GAINS WHEN YOU LOST EVERYTHING IN 2018:
>While any exchange of property triggers a tax event, Section 1031 of the US tax code carves out a niche for a particular kind of property exchange which permits one to defer the capital gain from the exchange until the 1031 property is disposed (sold for USD or exchanged for non-like kind property), so long as the property exchanged is of like-kind.

https://steemit.com/tax/@lpfaust/us-tax-considerations-crypto-to-crypto-trades-trading-bitcoin-and-altcoins

TL;DR Every trade is a taxable event.
HOWEVER.
If you made huge gains in 2017, and then LOST EVERYTHING in January 2018, you can carry your capital gains tax burden from 2017 into 2018 and essentially combine them when you file for 2018, because you have traded for a "likewise asset"(essentially trading one property for another).

the absolute state of the usa

>>7367998
No, you don't understand this. I've consulted with 8 tax specialists. And have been researching every relevant detail about taxes for 6 months. Why? Because I have hundreds of thousands of dollars at stake. In the United States, if you trade property for property, if you realized an increase in Fair market value measured in dollars relative to the cost basis of that property, you owe capital gains. Like-Kind doesn't apply by default. There's a complicated request and approval process that goes with it and started 2018 you're not even allowed to request it for cryptos. Even If you request like-kind deferral for crypto trades in 2017 you will almost certainly be declined and have special attention cast on you by the IRS.

>>7373793
Fuck, you're right according to Forbes:
https://www.forbes.com/sites/greatspeculations/2017/08/15/cryptocurrency-traders-risk-irs-trouble-with-like-kind-exchanges/2/#13fcc8477525
>The IRS would likely consider the exchange a dealer. Section 1031 prohibits dealers from participating in direct two-party like-kind exchanges since dealers hold inventory in a trade or business, not capital assets. The IRS would likely treat the exchange as a disqualified person in a multi-party like-kind exchange.

I AMEND MY POST >>7373629
The *HOWEVER* is probably wrong, and you can't defer your gains to the next year just because you've traded for another coin. If the IRS doesn't consider trading Gold for Silver like-kind, I don't think they'll allow you to trade Bitcoin for other altcoins and call it like-kind.

>>7365348
You sound Aussie - if there is no gain - you pay no tax - relax

>>7369369

OP, talk to an accountant.
I understand the position you're in because I too have also day traded myself into creating a massive tax liability without fiat to back it up. I do think crypto is going to recover, however, and you still have a decent amount of time before you really need to be sending anything to Uncle Sam. My thoughts would be - first, talk to a CPA and explain what's up. Second, hold onto whatever crypto you still have now and hope it goes up some more. Three, consider trying to file for like kind trades for 2017. I know that the IRS has recently provided clarification regarding like kind classification (it was never technically allowed but they weren't really clear enough on it) so a good argument could be made that they will accept that method of accounting this year. Worst case if you go that route is you'll get audited in the future (maybe 2-3+ years in the future) and, by then, you'll have your financial situation sorted out so you can pay the additional money you owe them.

Sorry for the wall of text.
Hope you find this helpful.

Don't freak out too much. It's all just money in the end and there will be plenty of other opportunities to make it.

>>7370498
SOYBOY BTFO

>>7374162
The only ambiguous thing is the usage of accounting methods other than FIFO. For some people, it makes a gigantic difference. For example if someone bought 10 coins, and decided they want to trade with 2 of them and keep 8 to take advantage of long term capital gains. If they're forced to calculate with FIFO, all of those coins long term capital gains status gets destroyed and converted to short term gains because the cost basis and date acquired get used up and recycled throughout the year whenever he buys or sells that small portion. That's the reason I contacted 8 tax specialist. Because I had to call that many to find one that was willing to consider accounting methods other than FIFO and taking the "conservative approach".

This accountant thought LIFO / Specific Identification was at least defensible in court in my case because I had non-trading portion of the coins sitting in cold-storage and I could prove they were not bought and sold in that period. And he was willing to do it because there's no law that says you have to use one accounting method over another anyway for cryptos. And the IRS most likely won't even look at my 8949 form. It gets filed as an electronic attachment to Schedule D, no human looks at it unless their system throws up a red flag. (Like you tried to do like-kind)

>>7365514
Enjoy getting fucked in the ass by the IRS

>>7374478
Sounds like the tax code for nontangible assets that can be subdivided into individual one-hundred-thousandths of themselves is somewhat unclear, huh anon