Crypto Taxes in the US

[Anonymous No.54399811]

What the fuck am I supposed to do. I compounded years of interest through staking, being a good goy, paying taxes, and because I compounded through an entire bull run and the prices crashed, according to the Koinly, I have $270,000 as taxable income, and $350,000 in capital losses. I'm about to do a test run to see what I will owe, but it's probably 37% of 270,000. Thanks Uncle Sam for raping me. I can't be the only one like this? Since there are no regulation on staking rewards, do I just not report them?

[Anonymous No.54399842]

land of the free

[Anonymous No.54400151]

>>54399842
this fucking nigger

[Anonymous No.54401291]

>>54399811
>$350,000 in capital losses
Isn't this taken into consideration?

[Anonymous No.54401334]

>>54399811
Happened to me too on the money I "earned" in blockfi, even though I have less money than I started with.

[Anonymous No.54401348]

>>54399811
ask a fiscal lawyer

[Anonymous No.54401354]

>>54401291
Can only use it to offset capital gains. Only $3k can be used to offset ordinary income. Usa is shit tier but at least we have freedom (we don't)

[Anonymous No.54401383]

>>54401354
Why only 3k?

[Anonymous No.54401391]

>>54399842
Land of the home. Free of the brave.

[Anonymous No.54401818]

I cashed out for $80k in 2021, bought a new car with it. Did my tax in 22 and tax payable was $60k, taxable income was about $250k ish due to defi shenanigans and crypto to crypto events.

Paid 80% of tax bill as most of my money had gone into the car and went on a payment plan for the rest. I don’t regret it.

To comply with tax obligations you basically have to take profit every trade. It’s fucked but necessary

[Anonymous No.54402714]

>>54399811
hello sir

mumbai here india

we pay no tax

i make $100K in crypto i keep $100K

good rupee sir

[Anonymous No.54402835]

>>54399811
Staking is considered mining, the moment you take possession of the coins you owe taxes on them as income. You can only write off $3,000 of capital losses against income per year, so you might be very much fucked in a scenario where you have $270K in income and $350k in capital losses .... you're basically going to owe the IRS like $110k in income tax no matter what... on the plus side you get to carry forward the $350k in capital losses deducting $3k a year against your income until you have a year with enough capital gains to even out that loss ... If the staked coins were locked up where you could not access them you might be able to successfully argue you don't owe income tax on them until the moment you unlock them but you'll have to talk to a tax lawyer about that... I believe I remember reading about a couple with tezos staking rewards that argued that against the IRS and won

[Anonymous No.54402953]

>>54402835
>I believe I remember reading about a couple with tezos staking rewards that argued that against the IRS and won
keep the staking rewards in token form until ready to harvest into usd.

[Anonymous No.54402995]

>>54401818
Simple trades aren't as complicated to comply with the tax obligations because if the coin you bought tanks in value all you have to do is sell by December 31st to realize the capital loss.
I.E:
>But 1 ETH at $1,000
>Swap 1 ETH on UNI to 400 ARB at first ten minutes of launch for $5... ETH Price at $2,000 = $1,000 capital gain
>ARB price tanks to $1 ... now your stack only worth $400 but owe taxes on $1000 capital gains from ETH transaction
In this scenario you just sell the ARB before December 31st and realize the $1,600 capital loss on ARB.... deducting against your $1,000 gain on ETH for a $600 loss total and you owe no taxes.

The issue is staking/mining/airdrops which are treated as income instead of capital gains.
I.E:
>Get 1000 ARB airdrop
>Claim in first ten minutes when its worth $10
>You just claimed $10,000 worth of income and now owe $3,000 in taxes
>You HODL to see if it goes higher
>Within ten minutes price tanks to $1
>ARB airdrop now worth $1,000 but you owe $3,000 in taxes
>Sell ARB airdrop at $1 realizing a $9,000 capital loss
>Can only claim $3,000 loss against income
>Still owe taxes on $7,000 income from airdrop
>Still owe $2,300 in income tax
>Airdrop only netted you $1,000

[Anonymous No.54403018]

>>54401354
Are you sure you're not conflating net capital loss with gross capital loss? I'm not american but that's how it works in leafland

[Anonymous No.54403049]

Yeah actually you probably are fucked. Most interest bearing instruments the coupons are considered taxable income I believe not capital gains, which is how municipal bonds and stuff are advantaged.

[Anonymous No.54403072]

>>54403018
Unfortunately he is correct. You can only write off $3,000 of capital losses against income per year.

[Anonymous No.54403106]

Also sorry OP but this is kinda funny, because I think probably the best way to argue against is that stock based dividends aren’t considered income until you sell, but then that would be implicating you’re buying unregistered securities. Pretty good catch-22

[Anonymous No.54403134]

>>54399811
Literally just roll with it and if you don't have the money go into tax bill negotiation. "Ah geez dude I don't got it, geez dude I lost my shoe in the street, I'm on pills dude"

[Anonymous No.54403148]

>>54403018
It is retarded but this is exactly why us burgers are always moaning about it.

[Anonymous No.54403162]

>never sell
>start LLC offshore
>start citizenship progress
>as soon as you’re ready to flip everything offshore and move to another country, renounce citizenship
>declare yourself poorfag, maybe they’ll tax you for taking your clothes with you
>move everything as part of an “investment,” “donation” to a no profit organization
>move as payment for services to your own offshore company
>fuck off, never look back, erase all financial history, cover your tracks, maybe begin process to move to another country right after
What’s stopping me from just running away and never even receiving any kind of tax avoidance notice? Of course they would all take place in the case of a 20x from here

[Anonymous No.54403187]

You pay capital gains tax on crypto, not income tax, there is no limit on losses for capital gains. You’re all retarded as fuck it you think your have a 3k limit on losses and have to pay everything else, that is absolutely nonsense, nobody would ever bother investing or that was the case as everyone who losses money (99%) would be paying taxes on all their investment money ending up having to pay all of their already taxed investment money on paying more taxes of a trade they lost money on, that is literally making 0 sense and I think you’re all underaged retards who’ve never actually paid taxes or ever made capital gain or loss and just enjoy LARPing on 4chan

[Anonymous No.54403228]

>>54403187
I agree with the majority of what you’ve said unfortunately staking/any kind of yield products is in fact BOTH capital gains and income, though its most and foremost seen as income the moment you receive a payment and then capital gains the moment it moves +0.00001%
What people really need to be focusing on is the selling part, the moving funds part right before taking profit

[Anonymous No.54403249]

>>54403106
>stock based dividends aren’t considered income until you sell

That's not true sir...

[Anonymous No.54403272]

>>54403187
You don't have an accountant, do you anon? It's taxed as income if the holding time is less than a year, which it often is, because it's crypto. TokenTax, CoinLedger, boutique accountants, they'll all explain the same thing.

[Anonymous No.54403385]

>>54403272
Yeah ok retard

So someone who bought 1 bitcoin at $69000 and sold it at $39000 because it was less than 1 year, so they owe $27000 in taxes because they can only offset $3000 max on losses

You absolute fucking retarded nigger


These are the people giving you advice on biz LMAO

[Anonymous No.54403406]

>>54403385
yeah bro, if he sells his Bitcoin at a loss the police are going to lock his ass up!

[Anonymous No.54403419]

>>54403249
That is though, if you receive your dividend in the form of stock it just lowers the cost basis, it doesn’t count as taxed income. Which is extremely similar to receiving more of the same coin for staking rewards. So if you don’t want to pay taxes, you have to admit it’s a security.

[Anonymous No.54403431]

>using koinly
>import everything
>capital gains for 2022: $970
>add-up total of USD I off-ramped from KYC'd exchanges to bank account last year: $92000
>Crypto portfolio went still went from $60k to $80k during bear market while off-ramping $92k
Lmaoooooooooooooooooo IT'S OVER

[Anonymous No.54403438]

>>54403406
Man imagine if he hodl all the way to zero after buying at 69000

He would owe the gov 69000!!!

[Anonymous No.54403459]

>tfw bought Bitcoin at 69000
>tfw bitcoin went to 0
>tfw 66000 taxable event because can only offset 3000 in losses
>tfw biz brainlet

[Anonymous No.54403475]

>>54403187
Only if you’re speculating on it, not if you’re mining it, as this anon pointed out
>>54402835
This situation is fundamentally different than buying a coin and selling it, and is more akin to interest payments probably on a CD or something

[Anonymous No.54403612]

The savior of crypto
https://www.congress.gov/bill/118th-congress/house-bill/25

[Anonymous No.54403672]

Remember the IRS only knows what a form 1099 has told them, otherwise they're just fishing

[Anonymous No.54403710]

>>54400151
This nigger out of the SEC this year, right?

[Anonymous No.54403723]

>>54401383
thats what it says in the tax code

[Anonymous No.54403727]

>>54402995
>mutts are taxed on airdrops
Do they really

[Anonymous No.54404456]

>>54399811
Switching crypto to unregistered security is not a taxable event.
Its like the IRS telling you that you have to pay taxes because you sold your crypto to buy a brick of coke from the colombian dealer because you expect the price of coke to rise.

Is XRP a crypto or unregistered security?