Taxes confirmation

I have no idea what I'm doing.

The plan was, start with 1 thousand.

Cash out with 50,000 to put towards a home.
Working on that phase now.

So all I do is pay taxes on my profit of 49,000 dollars, correct?

yes

You pay each time you sell a crypto for higher than you bought it(profit). This includes crypto to crypto transactions.

Ex: I buy btc 500.

1 month later i sell it for Cockcock, but btc is now 1000.

If i sell all my BTC for Cockcoin i am taxed on the profits of the BTC, that is final - initial.

1000(final) - 500(initial) = 500

And you are taxed on those 500 dollars(short term = 30%, long term over 1 year hold is a lower percentage)

Say I hold that 1000$ of cockcoin until its 10k, then i sell that for btc on coinbase and then convert that to usd. This is how it would go down:

10,000-1,000 = 9,000 of cockcoin profits you are taxed on.

IF btc increases before you convert to usd, you pay taxes on that. Say in the day before u sell the btc for usd it goes from 10k worth to 11k worth. You are taxed on that 1k profit.

You are taxed if you make a profit, but this can be offset by capital losses, IF YOU SELL AT A LOSS INSTEAD OF A PROFIT.

Full scenario: You buy BTC for 500. You sell it 1 month later for 1,000 worth of cockcoin. You hold for 1 year, it is now worth 10,000 and transfer the cockcoin to btc, and it goes up to 11k and then btc back into usd on coinbase. How much of this 11,000 is tax?

BTC ==> Cockcoin:
1000 - 500 = 500
30% x 500 = 150 taxed on this

Cockcoin ==> BTC
10,000 - 1,000 = 9,000
15%(the 1 year long term tax) x 9000 = 1350 taxed on this

BTC ==> USD
11,000 - 10,000 = 1,000
30% x 1,000 = 300 taxed on this

So on 11,000 you made, 150 + 300 + 1350, 1800 is taxed in this scenario

I'm defiantly going to prison.

Am I supposed to be reporting on the value they gain while I'm holding

Like if I just bought some Bitcoin and hypothetically forget about it for a few years as far as the IRS is concerned, can I be penalized, or does it not become real until I turn it into Cash

>Cash out with 50,000 to put towards a home.
Why don't you just make that payment in crypto you fucking idiot

You are only taxed when you make a sale. That is Crypto ==> USD, or Crypto ==> Crypto, AND you make a profit from what you originally bought it at.

If you buy btc at 500 and then buy Cockcoin and the btc is still 500, then theres no tax because there was no profit on it.

What the fuck do they need to know about your property.

>or does it not become real until

Fucking retard.

You're a fucking cuck if you do that shit.

OP, don't listen to this faggot ledditor. Pay taxes on what you put in vs what you withdraw. Don't use gdax. Trade on chineese shit exchanges and tell the IRS to eat a fucking dick. Either way, you shouldn't be cashing out to begin with cuck.

At what amount do I need to start reporting?
Like I bought some Bitcoin at 600 bucks years ago , and sold off a portion of it for 3k of etherium recently.
Do i need to report something as small as $3,000 of profit

Im just telling you how its done from the IRS perspective. If you are on coinbase or any exchange where you input your social they already fucking know your trades.

If short termed your investment, then you pay taxes as if the profit was added to your income.

>user makes 49k/yr from wage cuckery + 49k crypto profits = Taxes owed for 98k USD. You pay taxes on whatever bracket that lands you in now.

This is what Ill say to you. Theres gonna be a lot of niggas avoiding paying crypto taxes this year. So many so that the IRS is probably going to start slamming people with its longdick. Are they going to go after some guy who made 3,000$ over those playing with millions? Probably not. Is it worth not paying like 200 dollars in taxes to potentially invoke the longdick of the IRS? Idk thats for you to decide.

I didn't mean what is safe to not tell them and get away with, I mean what am I legally obligated to report or not report.
Like i know if i do something like less than 600 bucks in 1099 filed freelance work, it's not taxable.

Do we know what that limit is for profiting from Bitcoin sales? What's the dollar amount that they begin taxing us.

>bought 2.8 btc in 2013
>somehow ended up with only 1 btc because of cryptsy and some other random stuff i dont recall
>traded my way back up on etherdelta and other exchanges without my id
>therefore now at 1.5 btc

What would be the smartest move for the future. Should I keep the record of me buying 2.8 btc so i can "prove" having bought btc to the tax office and not having to tax them or at least taxing them less?

Or should i modify the record so that i only bought 1.8 btc so they wont know i have that many btc. Back then exchanges didn't really require anything to identify yourself to buy.

If you lost those coins then you didnt sell them, and thus didnt make a profit from them. If they are no longer in your possession then its impossible to make a profit from them, so i suppose theres no point in reporting them.

i was thinking, that if i continue to make profits on binance or cryptopia, where you dont require any id, you could use the coins you bought early on to say you have held them all this time.

Otherwise you might be getting questions about the origins of coins that appear out of nowhere.

You have to provide them with a list of all of your trades. If you get audited, they can get them from your exchange, and you're fucked if they catch you evading taxes.

All major exchanges have a way to export your trades. There are also other sites that can help you do this.

i only traded btc-fiat on exchanges which have my id. Any other trades were on the more shady ones.

On the books it can look like i only made btc to fiat trades, some of which are still not 12 months long, but better to have taxed 50 trades than 500

Do you need the USD value for each trade? AFAIK the exchanges don't provide that

in germany its basically btc -> eur -> alt even if its a btc -> alt trade

they basically jew you if they get a hold of your altcoin trades.

but how can they IRS your crypto transactions? What else can they do besides take your word for it? They aren't going to go through hundreds of shitcoin transactions

i am too scared of the german tax office, from what i read those people are worse than the irs.

if they get a hold of my shitcoin adresses and can link my name to it, i better be elsewhere.