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2280363 No.2280363 [Reply] [Original]

How do taxes work with cashing out a cryptocurrency? Am I better off holding them for a year so that I pay capital gains tax instead of income tax on my coins?

>> No.2280377

>>2280363
Up to 600$ a year is not taxable at all

>> No.2280398

>>2280377
I think it's up to like $10,000 actually before the IRS even cares. I'm talking about much larger sums obviously though.

>> No.2280404
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2280404

Austfag here, I have been looking into our laws. Starting 1st of July there is no tax on BTC purchases. As for trading gains into fiat anything under $10,000 is tax fee but I'm having a hard time finding if that is monthly or annually and can't find what tax applies if you exceed $10k.

Any other Austfags know the story here?

>> No.2280406

>make $40k/yr in your job
>buy $5k worth of crypto
>hodl several months, now worth $80k
>don't cash out
>whoops, you've just made a $70k profit, even though you have little free cash you have to pay the IRS 25% on that $70k and they don't accept crypto

>> No.2280413

>>2280406
Stop spreading this misinformation. You don't owe a penny in crypto until you cash out for fiat.

>> No.2280448

>>2280413
Wrong. You're supposed to record every transaction gain/loss for tax purposes according to the IRS.

>> No.2280483

>>2280448
>Gains are taxable in the year they are realized. Realization occurs when you exchange bitcoins for any type of other property; such as cash, merchandise, or services. This includes everything from haircuts to yachts. Essentially, any transaction involving Bitcoin is a realization event and triggers taxable gain. Note: IRS Notice 2014-21 expressly confirms this treatment.

>> No.2280639

>>2280406
That's not how investments work

>> No.2280663

>>2280406
You pay tax on realized gains, not theoretical.

>> No.2280668

PSA - most Eurofags don't need to pay taxes on crypto because it's not considered real money and capital gains are basically considered gambling gains

>> No.2280671

Haha americunts getting BTFO

>> No.2280673

>>2280406
wrong

you don't pay capital gains taxes on your house until you sell it. even if your house quadruples in value.

>> No.2280682

>>2280363

>amerifags
>paying tax on winnings from gambling
>freedom

>> No.2280718

>>2280363
i fantasize about this every now and then

if i actually mined and bought bit coins back then

fuck

>> No.2281055

>>2280363
>taxes
WHAT IS IT?

>> No.2281149

>>2280483
And since crypto is property, btc to eth to btc to eth is all taxable? Two different properties? Shits so confusing, fuck the gredy IRS

>> No.2281194

question: when do you sign up on poloniex, bittrex etc...do you sign up with real life name or not?
I see kraken requires only username and mail...do you use a 3rd shitty mail with insignificant name?

>> No.2281202

>>2281149
this. Can anyone clarify this?

>> No.2281227

>>2281194
>do you sign up with real life name or not
Yes, to increase limits you need to prove you are who you say you are so using a fake identity will prevent you upgrading limits and could lead to you losing you account if the laws change yet again.

>do you use a 3rd shitty mail
I use my primary because they send you important info.

>insignificant name
It's an email address, it could be anything.

>> No.2281265

>>2281227
ok, thanks, the email with stupid name is just in case somehow it gets leaked because...reasons.

>> No.2281375

>>2281149
>>2281202
As I understand it, trading coins that can be denominated in dollars incurs a taxable event, however coins that can't be directly purchased with fiat are considered like-kind assets and are only taxable when cashing out into fiat (or possibly into fiat denominated coins like eth or btc). Although, as long as you pay your tax on fiat cashed-out gains the IRS probably wont fuck you

>> No.2281404

If you pay tax on crypto you are borerline dumb. Launder it through gambling sites taking -3% vig and then you have gambling earnings = non-taxable. Unless you live in US I guess..

>> No.2281416

>>2280404
Call (((Them)))

>> No.2281550

I'm in the same dilemma in Europe.
My bank account is slowly approaching zero and my crypto gains are surpassing six figures.
In theory, according to German law, you have to account for every single transaction with its fiat value. This is virtually impossible. I started with 500 EUR years ago and never thought it would reach these levels. Two of the exchanges I traded on are bankrupt: MtGox and Bitcoin24.de. It's impossible to retrieve exact records.

I plan to arrange meetings with three professional accountants, and then choose the best.

Capital gains are tax-free here if you don't touch your assets for over 1 year, so I won't have to pay taxes on most of it, if I live frugally for another year. Not sure if that applies if you trade BTC/USD and other fiat pairs. I took care to almost never trade BTC/EUR.

>> No.2281570

Anyway, I'd advise against tax evasion and certainly won't attempt it myself.
The penalties are harsh. Just don't.

>> No.2281577

what if i would like to avoid paying taxes
is an offshore or swiss for instance bank account viable?

>> No.2281585

>>2281577
>is an offshore or swiss for instance bank account viable?
Almost all countries are reporting your bank balances to your home country. Switzerland is no exception anymore.

https://en.wikipedia.org/wiki/Common_Reporting_Standard

Talk to a professional, they're not that expensive and know their shit.

>> No.2281587

>>2281577
enjoy your stay in federal ass pounding prison

>> No.2281593

>>2281587
The worst they would ever do is they would put you for a couple of months into a white-collar, minimum-security resort! Shit, we should be so lucky! Do you know, they have conjugal visits there?

>> No.2281609

>>2281587
im from southeastern europe so even if i get into trouble, it should be miniscule

>> No.2281623

>>2281593
I'm sure bubba will visit your boipucci

>> No.2281710

>>2281550
>MtGox and Bitcoin24.de. It's impossible to retrieve exact records.

was ist genau passiert?

>> No.2281728

>>2281404
what gambling site do you use?

>> No.2282148

>>2281710
MtGox went bankrupt, after either a hacker or an insider stole all the BTC
Bitcoin24 was shut down by the authorities because they did not comply with anti-money laundering laws. IIRC they also had security issues. The founder was an inexperienced 20-something guy

I did not lose much in either case, but the records are lost forever which makes accurate tax reports impossible

>> No.2282203

>>2280404
I'll have a better idea after EOFY, but as far as I can tell each trade is a CGT event, so you gained on ETH and traded back to BTC, you would owe 30% on that.

>> No.2282237

>>2282203
Keep in mind losses offset. So really it's just going to be 30% profit, but each trade needs to be accounted for

>> No.2282914

If you aren't holding BTC for 5+ years you are an idiot.

>> No.2283539

>>2280682

>amerifags
>paying tax on something that can't be protected
>freedom

Your taxed for the protection you get from the government. Capital gains on a house is due to the military being able to protect your house. Capital gains on the stock market is due to FDIC protection. Capital gains on savings is due to FDIC protection. Your money gets stolen from your savings, checking, or cc - you're covered.

Yet you're taxed on something that can be stolen or lost, with no protection offered from the government.

> land of the free

>> No.2283643

Do you have to pay if you turn it in gold and then cash out?

Where I live capital gains on gold are not taxed.

>> No.2283657

>>2281149
>>2281202
Yes. That's exactly what I said in my previous comment then dumb fuck OP posted the IRS section I was referring to thinking he was countering my point.

>> No.2283661

>>2283643

Oh and neither is crypto, only if you mine them, or if you have a registered business for trading or smth like that...

According to our IRS, bitcoin is not a "real" financial instrument

>> No.2283670

>>2283643
Yes.
The purchase of gold counts as realization

>> No.2283803
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2283803

>tfw britbong
>the govt treats it as a foreign currency
>have no idea how this affects me
I try understanding ht elaw books on this shit but there are so many and it takes years to understand any of it fuck

>> No.2283926

>>2283803
Rule of thumb: You have to pay taxes on any profit,
with very few exception.
Advice: Talk to a professional. They don't cost a fortune and it's their job to minimize your tax burden.

>> No.2283961

>>2280448
And lucky for the coiners their exchanges do all the tracking for them.

>> No.2283969

>>2283803
at least you dont have to report every btc to shitcoin trade separately like we do. its either lie or waste hours working out what you traded and trying to find old exchanges you used. count yourself lucky.

>> No.2283986

>>2283969
It gets even funnier with the high Bitcoin TX fees.
Enjoy factoring in all those too :^)
100x 2$ TX fee is 200$ loss, can't ignore that