US taxes on Bitcoin Earnings

Need_TLC
Need_TLC

family member talked to a tax consultant today.
consultant said that every time I traded from bitcoin to cash this year I owe income tax on its value.
I started at 1.9 bitcoin, and over a several dozen trades i went, up, down and am now at 2.1 bitcoin
I have only withdrawn $150 worth of btc to a bank account to keep.
Tax consultant has to be bat-shit crazy if she thinks I owe $250k+ in taxes on $25k bitcoin.
Or am I pic related with the IRS?

All urls found in this thread:
https://www.irs.gov/businesses/small-businesses-self-employed/virtual-currencies
https://www.irs.gov/pub/irs-drop/n-14-21.pdf
https://Saltlending.com
TurtleCat
TurtleCat

@Need_TLC
this is why women should be in cages. make an appt with a man accountant. no you dont owe 250. just pretend you bought, held a year and then sold.

VisualMaster
VisualMaster

@Need_TLC
There is no fucking way you need to pay taxes on transactions between fake internet money. That makes no fucking sense.

FastChef
FastChef

You're so fucked lmao

Booteefool
Booteefool

@Need_TLC
Would be capital gains tax not income tax anyway.

Your account is literally a retard

cum2soon
cum2soon

@TurtleCat
If the money received from interim trades is taxable income, shouldnt the money spent to purchase BTC be treated as cost of business, and thus deductible, making my total taxable income for the year just $150?

iluvmen
iluvmen

@Need_TLC
Crypto is classified as property not currency
Tax consultant is a con

WebTool
WebTool

@Need_TLC
Yup, that's the way it works. Taxes on every bitcoin/fiat trade profit. Good luck.

CouchChiller
CouchChiller

@Need_TLC
You owe on what you cashed out. That accountant is literally fucking retarded holy shit.

haveahappyday
haveahappyday

@CouchChiller
Wrong. Selling to fiat is taxable, even if you don't withdraw your money. That's why people use tether.

askme
askme

@Need_TLC
WTF are you trying to say? Where did $250k come from?

You pay taxes on your gains only. If you put $1000 in and you cash out $1500, you pay tax on $500. The rate that you pay depends on if you held it for longer than a year. If shorter than a year, the tax rate is higher.

If you put $1000 in and you took $800 out, you don't pay any taxes. You actually get to write that $200 off as a loss. So, if later that year you managed to make that $200 back and cashed it out, you pay $0 tax because you are back to where you started.

It gets more complicated when you trade BTC for alts and then back to BTC. You are supposed to pay tax on any gains you made by trading. It's going to be real hard for anyone to track all that info down from all these exchanges.

lostmypassword
lostmypassword

@WebTool
But how the fuck would the taxes on his profit cost $250k if he only has 2.1btc

Playboyize
Playboyize

@CouchChiller
this is literally what I think. every time I exchange BTC to USD it is taxable income. Everytime I trade USD to BTC it deducts from my taxable income, cost of doing business basically, and my final taxable income at the end of the year should be the net profit.

WebTool
WebTool

@haveahappyday
Technically selling to tether is that same thing. Harder to track down though.

Supergrass
Supergrass

If you have a smart accountant you can use individual bucket method for accounting and you will owe only the amount you traded with.

Dpendibg on how much of ur stash you traded with you will only owe taxes on 10k or 15k income

Boy_vs_Girl
Boy_vs_Girl

@WebTool
tether is literally imaginary internet money tho USD is not

SomethingNew
SomethingNew

@askme
Buy btc at $5000 -> sell at $6000 -> buy at $7000 -> sell at $4000

You made a loss, but you still owe the jews $250 in taxes. That's the way it works. That's why people call it theft.

Methnerd
Methnerd

@Playboyize
every time I exchange BTC to USD it is taxable income
Only if the USD is worth more than what you put into BTC that year. If so, you made "capital gains" and you pay taxes.

If bought BTC at a high price and then it crashed, then you sold for USD, you pay no taxes because you didn't make any "capital gains"

Emberfire
Emberfire

@lostmypassword
Because he's either bullshitting, misunderstood, or the tax accountant is actually a larping janitor.

TechHater
TechHater

@Boy_vs_Girl
Doesn't matter.

TECHNICALLY if you trade any coin for another coin (or USD) AND you made a profit, you owe taxes. Good luck to the IRS tacking down all the crypto to crypto trades though...

GoogleCat
GoogleCat

@Emberfire
this is literally what I was told.
she told me as far as taxes go 'they're like trading stocks'

Emberfire
Emberfire

@SomethingNew
Negative sir.

If you did all of that in a single year, you made a $2000 loss and owe no tax.

Sir_Gallonhead
Sir_Gallonhead

How to solve tax problems with crypto:
1. make ATM that allows cashing out of crypto with capital gain fees already deduced
2. force all banks to adopt it
Why all governments are so fucking stupid.

lostmypassword
lostmypassword

@Emberfire
Wrong. Even reinvested capital gains are taxed.

Playboyize
Playboyize

@SomethingNew
This is totally wrong. You declare 13k in cost basis and 10k in proceeds, thus a loss of 3k

TechHater
TechHater

@Playboyize
12k* this is why I'm a retard, not an accountant.

massdebater
massdebater

@Boy_vs_Girl
Whether its USD or Tether it ain't backed by anything...

Fried_Sushi
Fried_Sushi

@TechHater

Good luck to the IRS tacking down all the crypto to crypto trades though...

This. All of those coinbase records they're getting? They'll probably only pursue the top 20% earners and leave it at that to scare everyone else.

The IRS loves intimidation tactics. Wesley Snipes is a great example.

Harmless_Venom
Harmless_Venom

Just fund these. should answer everyones questions.
https://www.irs.gov/businesses/small-businesses-self-employed/virtual-currencies
document on virtual currencies:
https://www.irs.gov/pub/irs-drop/n-14-21.pdf
Im not a tax accountant, but it does indeed seem like the one I talked to was batshit crazy.
It looks like what matters is the net profit/loss, not the gross profit. Its treated as a good, and if you are a business that has purchased product A for $1000, sold it for $2000, and purchased two more product A's for $1000 and they have not sold, your net gains do not exceed the cost of doing business, and thus there is no taxable income from it
seems like it anyway

takes2long
takes2long

https://Saltlending.com launches this month user. Bypasses capital gains tax completely. Made by the same guy that made Shapeshift.

likme
likme

@Need_TLC
on the gains, not on the value

lostmypassword
lostmypassword

@Sir_Gallonhead
pffftpffpftt

TalkBomber
TalkBomber

@GoogleCat
She's right about that, but are you SURE she didn't say $2.5k instead of $250k??????

Crazy_Nice
Crazy_Nice

What kind of retarded system is that?
Here you put 10k in. Do what the fuck you want. Let's say you got 12k now.
You take out those 12k, BUT you pay tax only on those 2k gains. Not 10k, because it was investment, thus it's not taxable. They took some of it from platform fees when operator got taxed.
If you had a loss and take out only 7k, it's not taxable. But you have to prove it showing operator's issued statement and transaction copies that you no longer have cash on platform and thus you committed loss.
Here you have to prove to the system how much you put in, how much you have in platform and how much you took out of platform.

Bidwell
Bidwell

@TalkBomber
she told me that I owe a capital gains tax EVERY time that I converted to USD

Gigastrength
Gigastrength

you owe tax on the profit you shit eating retard
not like it matters since you're a fucking poorfag who only made 3k

eGremlin
eGremlin

@Need_TLC

Can't you just trade the BTC to something else and trade that for cash instead? If the IRS is only looking at Bitcoin, you should be good with anything else, right?

Fried_Sushi
Fried_Sushi

@TalkBomber
What is this shit meme?

cum2soon
cum2soon

I traded my 4000 eth (originally purchased for 2BTC in 2014) for btc at ~0.05btc/eth then i sold 20 of those BTC. I bet none of you mouthbreathers can tell me what I would owe in USD taxes.

hairygrape
hairygrape

paying taxes = pic related

Gigastrength
Gigastrength

@eGremlin
fuck it ill just invest in zimbabwe dollars so I become a quadrillionaire

FastChef
FastChef

@Fried_Sushi
A Croatian war "criminal" escaped a twenty year sentence by consuming poison within the UN courtroom after being accused of many things, including blowing up a bridge in which he had proven to not be his fault in an entire book that he wrote.

Crazy_Nice
Crazy_Nice

@Gigastrength
buy miners with btc, get them send to you, put them on ebay, get cash, if taxman comes, pay vat
ahahahaha

SomethingNew
SomethingNew

@Bidwell
That's correct, on the GAIN, not the gross.

takes2long
takes2long

Rule of thumb:
Yes you put your own money into it
No you never traded it
Yes you held it over a year

Easy

hairygrape
hairygrape

Capital gains tax is the most cunt act taxation scheme ever, how dare the filthy greedy fucks come try to wet their fat beaks in my crypto gamblin

Raving_Cute
Raving_Cute

@hairygrape
this

normies are so scared of gubermint they actually go out of their way to pay taxes

Burnblaze
Burnblaze

@Bidwell

Yes, but you only owe taxes on what you actually gained. For example, if you bought BTC at $1 and sold it at $3, you owe taxes on that $2 gain, even if you were to invest it right into Bitcoin again. You should have set aside a portion of that to pay the taxes. I don't know what the rate is, but let's say 15%. You should have payed the leeches $0.30, and put the remaining $1.70 into BTC again.

Don't let them jew you out of your money, though. There are some good ways to keep your money. Even if Coinbase reports how many BTC you bought, just tell the IRS that you are holding them and therefore don't owe any taxes. When you trade with them again, just say that they were bought from someone at nearly the same price (or slightly more than) that you sold them for.

SniperGod
SniperGod

Hahaha how the fuck are they going to know im cashing out my btc into fiat if im selling btc to individuals face to face with cash

Spazyfool
Spazyfool

@VisualMaster
he didn't pay taxes on his WoW gold

you're fucked m8

Dreamworx
Dreamworx

@SniperGod

Nice. Don't let these fucking scumbags get a cent.

Garbage Can Lid
Garbage Can Lid

Cant I avoid this by depositing this stuff to a family members bank account in say, Poland, and then just having them send me the money over. Its assumed I can rely on my family not to fuck me over.

ZeroReborn
ZeroReborn

@SniperGod
@Garbage Can Lid
There are million ways to do it.

GoogleCat
GoogleCat

@Need_TLC
wrong, maybe on the profit of the trade at most, anyway just say u held it a year u fag

5mileys
5mileys

@Need_TLC
You do owe taxes every time you realize gains (cash out your chips) net of your losses of similar nature (LT vs ST). What's hard to understand about this?

Playboyize
Playboyize

@Need_TLC
But where's the Problem? These are the rules and that's why you have to pay. Someone needs to pay for all of this and this time the person is you. So everything is OK.

Playboyize
Playboyize

@Garbage Can Lid

You get taxed on the gains, and it is a fucking crypto currency. Can't you just say you bought that particular bitcoin off some drunk guy on the street for $15k and then sold it at a loss for $14k, so you owe the jews nothing? Thank God you still have that bitcoin you bought from Coinbase and never touched to fall back on.

SniperGod
SniperGod

@lostmypassword

they would not. he's an idiot.

VisualMaster
VisualMaster

@cum2soon
That is how it works. You owe taxes on the GAINS every time you trade. A simple way to figure this out is what are the net gains from the original purchase in fiat, assuming it all happened in one year. You owe tax on that amount. You add the gain to your income to determine tax bracket. For most people it's between 15-25 % That would basically be the sum of all your gains and losses. Technically you have to document each trade though.

girlDog
girlDog

@Need_TLC
RIP in peace, bucko.

lol

BunnyJinx
BunnyJinx

@Playboyize

t.ax consultant

Carnalpleasure
Carnalpleasure

you guys are all fucking dumb for the most part

1) depends on your jurisdiction
2) capital gains tax - do you speak it? Take 50% in most jurisdictions unless it's the sole source of your income and your'e then a day trader . Again, different countries have different rules in Canada for stocks if you make more than 5 trades a fucking year you are a day trader by practice.
3) the year hasn't ended, if you're holding something you can trade at a loss, do it and buy right back in so you can bank a capital loss to apply it to other capital gains throughout the year

I paid $300 for an hour to speak with an accountant and she was fucking dumber than most of you. Luckily I can read and use Google.

Booteefool
Booteefool

@askme
Lmfao this is the only person in biz that understands basic tax law

I am convinced biz is just a bunch of niggers and brownskin scum pushing bull shit to fuck with those who actually have money to invest into crypto

Snarelure
Snarelure

@GoogleCat
Lmfao she's just a dumb cunt. Should have finger blasted the cunt.@Emberfire

ZeroReborn
ZeroReborn

@Booteefool
No, he's form some fucking EURO fag country and talking in general terms causing confusion. Those tax rules are completely different. For most normies we will be using capital gains rates on our gains for every trade. FFS guys.

New_Cliche
New_Cliche

@Sir_Gallonhead
You should probably die.

massdebater
massdebater

lmao taxman can ead desu

BlogWobbles
BlogWobbles

@FastChef
which he had proven to not be his fault in an entire book that he wrote.
and he would have gotten away with it too, if it weren't for those meddling witnesses.

DeathDog
DeathDog

@Carnalpleasure

Why even let the government know. This is a cryptocurrency, and it would be extremely expensive, if not impossible, for them to actually track down where you bought every BTC from. Can't you just say you bought those particular BTC that you sold for more than you sold them for, from some random guy on the street? If they bring up the BTC you bought from Coinbase, can't you just say that you are still holding those ones or that they were lost/stolen?

Stark_Naked
Stark_Naked

@ZeroReborn
No.

There is no nation on earth where you pay taxes on each individual trade. At least not yet.

It's all capital gains you filthy subhuman pajeet.

Prove me wrong faggot.

Lord_Tryzalot
Lord_Tryzalot

@Sir_Gallonhead
Because they can have this already + 25%
You're fucking them over or get fucked over

5mileys
5mileys

@FastChef
arrow book he wrote
arrow proof of anything

Soft_member
Soft_member

@Need_TLC
Either you misunderstood your accountant or she's fucking retarded. When you buy crypto and sell it for another currency whether that be fiat or some other coin, if you profited from the transaction, you pay taxes on that profit. If you sell at a loss, you pay a percentage of that much less in taxes.
So if you buy bitcoin at 10k and it goes up 11k and you sell it all, if you're in the 25% capital gains tax bracket you pay $250 in taxes because you made 1k profit.

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