Paying Taxes on Cryptos

[Anonymous No.5170677]

How come you guys never discuss how the taxes are paid?

Supposedly the I.R.S. want to tax every trade you made. What have you guys done to pay the taxes possible?

[Anonymous No.5170742]

>>5170677
I dont think anyone on /biz/ ever tried cashing out they just enjoy their theoretical net worth while not getting any immediate tangible benefits.

If you have a few thousand sell it on localbitcoins for cash

If you're one of the bitcoin millionaire boys get an offshore bank account like all the other rich people

[Anonymous No.5170760]

>>5170677

My question is, how the hell am I supposed to pay taxes if I keep all my crypto in crypto.

Secondly, wouldn't it be simpler to just say "i put in 1k into the crypto system from the banking system, I am removing 30k from the crypto system to the banking system, I pay capital gains on 29k"? I don't understand how the hell that is not just easier, what am I missing here?

[Anonymous No.5170951]

>>5170742
>I don't think anyone on /biz/ ever tried cashing out they just enjoy their theoretical net worth while not getting any immediate tangible benefits

Then why is everybody acting like they cashed out?

I bought into the hype yesterday and bought some crypto, but I am scared to trade it or cash out.

[Anonymous No.5170998]

>>5170760
Money laundering. They need a record of every trade to see where it came from

[Anonymous No.5171001]

lol

taxes are like jury duty. only idiots pay that shit.

[Anonymous No.5171083]

>>5171001
Unless you live in some 3rd world country, you'll be paying taxes whether you like it or not. Banks/Exchanges report to Tax Agencies, that is what is scary to me. I fear the IRS.

[Anonymous No.5171188]

>>5170677
Linked api to bitcoin tax and they took all my trades and converted it into a spreadsheet of what I owe. I was going to do it myself but it was a lot. The safest option is to go first in and first out rule because that’s what stock people use and it’s the least likely method of capital gains calculation that will be rejected.

[Anonymous No.5171208]

Will the IRS be cool with me claiming crypto losses?

[Anonymous No.5171240]

>>5170760
Someone correct me if I'm wrong but:
capital gains = sum of (value of stock when sold - value of stock when purchased). In this case the IRS says crypto is like stock, not like foreign currency.

consider case A: In 2017, You buy $1000 in a coin, It's value went up to $2000. In the same year you sold that coin for 10 of another coin valued at $200, then their value went up to $400. You sold all 10 coins and "cashed out" at $4000. You would owe:
$2000 - $1000 = $1000
$400 * 10 - $200 * 10 = $2000
$1000 + $2000 = $3000
In essence, the same if you did your cash out - your initial invested.

Case B:
In 2017, You buy $1000 in a coin, It's value went up to $2000. You held on to it for 2017. In 2018, you sold that coin for 10 of another coin valued at $200, then their value went up to $400. You sold all 10 coins and "cashed out" at $4000. You would owe:
$2000 - $1000 = $1000
For 2017
$400 * 10 - $200 * 10 = $2000
For 2018
In essence, the same if you did your cash out - your initial invested, however this is applicable for both tax brackets, and so Uncle Sam isn't waiting for his take. It's actually helpful if you have it spread over years so that you are in a lower bracket, rather than 1 year out of 5 having a massive jump. that might push you into another bracket. On the other hand, coins value aren't decade long investments like traditional stock. There's also capital losses that need to be considered.

[Anonymous No.5171241]

>>5170951
Idk about these people but I put in 700 and when I made x2 profit I took out my initial investment. Now I’m playing with my gains. Shit is fun so I don’t even care if I can’t cash out. But I did send 60 dollars to myself today from my Coinbase account. I don’t know about Americans but other people have cashed out more than 6 digits.

[Anonymous No.5171361]

>>5171240
Coins are treated as property. My tax bracket is 25% so whatever profit I earn from flipping a coin is reduced by 25% short term or 15% long term

[Anonymous No.5171369]

>>5171361
Whats constitutes short or long term?

[Anonymous No.5171385]

>>5171241
I'm a dumb burger, so I have to be careful. My sister got audited last year and paid over 8k, because her CPA went nuts with deductions. The IRS are vicious and will seize your assets here.

[Anonymous No.5171393]

>>5170677
Not claiming
They can come after me if they truly care

[Anonymous No.5171459]

>>5170677
How many taxes do you have to pay for flipping cards??

[Anonymous No.5171461]

>>5171361
Oh yeah, you're right:
https://www.irs.gov/pub/irs-drop/n-14-21.pdf
Ignore everything I said, I am a banana

[Anonymous No.5171481]

>>5171459
I don't know, but I wish there was information on this. I want to ride to the moon...one day.

[Anonymous No.5171574]

>>5171459
capital gains is one of the simplest taxes you could calculate you retarded neet

[Anonymous No.5171853]

>>5170677
Alot of people don't pay the taxes, until a few years ago they did not even ask specifically for crypto gains, and they tax the profit you made like income, you just fill out the paperwork and if you owe you pay them, it's not as hard as people think.

>>5170742
>>5170951
You constantly cash in and out, if you are not doing that you are doing this entire thing wrong

>>5170760
You don't until you convert it back into USD, that is why alot of people decide to launder

>>5170998
Not always, if they ask usually they just want your records as in your yearly buy and sells all entered on a text document or spreadsheet, it's only if shit does not add up by alot when they bother you/your exchange for more info then that

>>5171001
when you make so much it's easier to just pay the tax and not worry about it

>>5171083
Yes every single bank from big-shit to credit union does their own audits and is happy to comply with any IRS email/phone call about your records, that is why your shit needs to add up or nearly add up

>>5171188
don't fuck with them

>>5171208
not unless you're willing to give them access to your account either physically or in writing, you can absolutely write off your internet bill cause you need it to work

>>5171361
Crypto is capital gains, usually compared to stocks then property

[Anonymous No.5171905]

>>5170677
>>5170742
>>5170760
>>5170951
>>5170998
>>5171001
>>5171083
>>5171188
>>5171208
>>5171240
>>5171241
>>5171361
>>5171369
>>5171385
>>5171393
>>5171459
>>5171461
>>5171481
>>5171574
>>5171853

Hey, I've heard it's possible to make a donation and write your taxes off on it. Any way we can make some huge donations in the amount of reported stuff and not give them shit next year?

Also what the fuck am I supposed to be liable for? Are we seriously reporting every single shitcoin for shitcoin trade we made this year?

[Anonymous No.5172044]

>>5171905
When donations are "tax deductible" it's not the exact amount you donated but usually around it, like writing things off it depends

And legally anything in profit over $400 within a year of time, most exchanges and trading platforms already document the buys and sells, during tax season take a few days to do math and make sure everything is right and see what you owe and then compile all your trade data onto a document and be ready to send them when the tax man asks for more info and usually they won't ask for anything more then that if all adds up, if you made a miscalculation and owe more just say you made a mistake and will pay it, not a big deal as long as you have paperwork that adds up, also after like a year or so you can get gucci with write offs and write off your internet bill and shit like that cause you need the internet to do your tradings and make profit so you can deduct it on your taxes....you won't get the full amount but probably close to it

[Anonymous No.5172167]

What happens if say I put 100 into a shitcoin, now it's at 200. I cash out the 200 and put it into another shitcoin. But this time my 200$ goes down to 25$. Do I still have to pay taxes on that first trade? What about the second trade?

[Anonymous No.5172242]

>>5172044
Does this mean I could make such a donation during 2018 tax season? I thought it would have to be during 2017 to qualify.

[Anonymous No.5172372]

>>5172167
You have to pay it on the first trade, you can write off that you made a loss but they won't always grant it/approval the full amount, nothing is ever certain always depends who is doing your shit

>>5172242
If you wanted to write off a donation for your 2017 taxes then the donation would of had to been made in 2017/before January 1st but again the full amount won't be written, not even half of the amount you donated will be written off, especially if this is your first few tax seasons

[Anonymous No.5173006]

i am completely lost on how to file taxes. i basically lost money after putting a very small amount in and trading on bittrex for a month. maybe put 400 total in and ended up depositing about 100 into my checking account from gemini. is it even worth it to report this?

[Anonymous No.5173697]

>>5171369
One year

[Anonymous No.5173897]

>>5171853
>ok anon I'm Jamal, I'll be conducting the audit interview, now let's go over some of these trades, I see there are over 600 pages of records here, you must spend a lot of time on this

h..ha- yeah it- it's like my job now, I never expected it would take off so much.. ha

>let's just flip to page 355 here and see if we could go over a typical transaction
>I see you transferred 1000 waves tokens here, and then exchanged them for EYFF, could you tell me about EYFF and whether you still hold that asset? we were having some trouble finding background information on some of these obscure assets. if you could just give me some information I would be able to verify on EYFF, we shouldn't have any additional problems

[Anonymous No.5173986]

Imagine you had $10,000 worth of BTC. You could sell on exchange for that, or you could accept a cash in person deal for $8,500.

That’s how you avoid the taxman.

[Anonymous No.5174375]

Whatever you make is nothing till it is cashed out. If you put $1000 in today and cashed out at $10,000 someday in the future, you don't report anything till that tax year. Save your buy/sells to a spreadsheet or export to pdf for record keeping. Report it as capital gains. The IRS will tax it at 28%. If you cashed out big money it would be wise to pay the 28% tax and go on with your life. There are ways to "launder" btc. For example you could have done a ton of trades on binance and somehow managed to turn a huge profit. You don't want to transfer over btc to gdax wallet. transfer over to a secure private wallet. go to newegg and purchase using btc. u will get burned in the future if u go full on retard and buy lots of stuff n u get audited in the future. they will want to know how you paid for all your new cool toys. If you are clever you figure out which exchanges are US based and avoid bringing your altcoins gains through them. Regulations are still very lax and can get away without paying tax on modest gains if you want to use your btc to buy stuff for yourself. The IRS can't go back and tax you for previous yrs on new legislation. Be clever in the time being. But, I suspect the people worrying are doing it on <$1000 . Which really is a joke