Oy vey! How are you guys keeping track of your tax liability from trading alt coins?
For example say you buy btc over a period of time and trade it for assorted altcoins back and forth. You must keep track of which buckets the coins are coming from and each BTCxALT pair needs to be treated like BTCxUSD and USDxALT. Add onto this that fees are always in either percent of BTC or ALT from the transaction of which most software needs to be a USD amount. So you calculate the fee in USD but it comes out to either a cent or less than a cent. Both these cause all sorts of problems with the numbers not adding up right due to rounding issues.
I could skip the fee altogether, but again then the software complains that coins are missing. (And the fee must be in USD so can't just be inferred from the missing coins it needs to be calculated beforehand).
What I've tried: >GNUCash can't just create arbitrary assets and autistic developers can't agree how to implement BTC
>ledger-cli double entry system which can have arbitrary assets really fucking difficult to use I'd have to create some sort of script to do this with any accuracy and even then I don't trust I'm using it correctly.
What software can I use to handle this? Will quicken be able to calculate all of the above assuming I just give it amount of BTC, amount of ALT and BTC/USD price that day?
My gains from 2016 are not much to worry about tax wise, but I want to do it from the get since I'll need to track which pool coins are coming from anyways.
>not realizing gains >trading under verification limits >exclusively trading on a platforms based outside the US without any insurance and with no real owner
Yes sadly I am going to let the gubmint take their cut. I'd rather just do it right from the beginning.
Dominic Jenkins
My plan is to report all altcoin trades on a 1031 as like kind exchanges since they've classified cryptocurrency as property and not realize any gains until converting to fiat.
Juan Gray
It's a few years outdated but this rebbit attorney suggests not to do this. Although no official guidelines say not to. reddit.com/r/Bitcoin/comments/1uccfz/i_am_a_tax_attorney_here_are_my_answers_to_the/ >The regulations for like kind exchanges require the two property types to have the same rights, characteristics, and obligations. Whether altcoins and bitcoins meet this test is uncertain, but I would tend to think not. >IRS Notice 2014-21 concluded that bitcoins are not a foreign currency, therefore it is possible that bitcoin can qualify for like-kind treatment if the "rights and characteristics" test is met.
Either way what software or accounting method are you using? I don't mind manually entering things, but trying to manually calculate what's coming from what pool makes my head hurt and I know I'll fuck it up if I try.
Jackson Wright
Yeah, I've seen that, I'm perfectly willing to challenge the IRS on this, I can show a good faith attempt to follow the tax law so the absolute worst case scenario is that I end up having to claim gains as realized which is what I would be doing anyways if I wasn't reporting it as like kind exchanges. There are CPAs that have written the IRS requesting guidance on this so at the very least they think its a possiblity.
So you pay with everything in gold and don't use dollars I suppose?
Charles Sullivan
I was just going to report anything I transfered back to my bank account as capital gains. Is this not correct? I might not ever transfer back to USD, since I only put a grand into ETH that is now 3 grand of BCT, ETH and various alts.
Kevin Mitchell
Thanks for the info. Yeah I guess it's actually a ton more feasible if you consider everything to be like kind, then you don't have to track individual transactions on the exchange. And if the IRS didn't make the effort to clarify it, you should probably have a pretty strong argument in your favor.
Another question, say you *weren't* treating these as like kind, are you still only taxed on the net gain of your crypto assets as a whole? For example you gain $100 on TRUMP and lose $50 on PUTIN, is that counted as one gain of $50 or a gain of $100 and a separate loss/write off of $50? I ask because apparently since it's a property the max write off for a loss is something like $5K. So there could be a situation where in reality you have a small or even negative net gain, but on paper you have to pay a large amount of taxes.
Camden Lewis
Like said, yeah probably. But there was another user in a different thread who was tracking each transaction and treating a BTCxALT as 2 transactions. And he wrote his own software to do this.
Technically if you were trading on exchanges for BTC/USD you should be tallying all those transactions (I think), but at the end of the day the numbers would be the same.
Even still since you probably bought bitcoin over many transactions you need to do a first in first out analysis of which coins have been sold for gains.
Asher Wilson
Fed reserve is debt based, senpai. Also, it's not controlled by the Rothschildes.
Charles Davis
>Another question, say you *weren't* treating these as like kind, are you still only taxed on the net gain of your crypto assets as a whole? For example you gain $100 on TRUMP and lose $50 on PUTIN, is that counted as one gain of $50 or a gain of $100 and a separate loss/write off of $50? Pretty sure the second, both would go on schedule D. >Even still since you probably bought bitcoin over many transactions you need to do a first in first out analysis of which coins have been sold for gains. LIFO would likely be more beneficial.
Isaiah Martinez
Hmm so I'm reading now that although you can reasonably consider them a like kind exchange you are still supposed to report the actual transactions that led to the final transaction into USD. Although if you immediately reinvested the USD into more coins I think it still falls under a like kind investment, it's not until you cash it out and don't reinvest it, others are saying no. >reddit.com/r/Bitcoin/comments/29027v/taxes_did_anyone_report_their_altcoin_trades_as/
That thread links to bitcointaxes.info so I'm going to see if that works at all.
>Pretty sure the second, both would go on schedule D. Wow so you could get really fucked over and end up having to pay more taxes than total gains by trading bitcoin x altcoin pairs
>LIFO would likely be more beneficial. Oh no doubt, there's all sorts of other qualifiers for that which I'm not primed on. Also you have to do the same calculations more or less which is what I'm hung up on.
Nathaniel White
Well bitcoin.tax / bitcointaxes.info is actually really nice (except doesn't support yobit natively and yobit has no way to export a csv, wtf?) Free tier is capped to 100 trades, but I think I can make 2 separate reports and merge them I may use it this year and try to make my own software next year (hey there's a nice biz idea).
Nicholas Clark
Educate yourself
Adam Ortiz
KYS
Samuel Thomas
>How are you guys keeping track of your tax liability from trading alt coins? Spoiler: They aren't.
Camden Martin
Is it only the US of A that has this kind of weird tax?
Brayden Stewart
Some parts of yurup won't tax crypto gains. In the US you're obligated to report if you even bought a sandwich (it wouldn't really matter if you didn't, but it would mess up your calculations)
Gavin Cruz
>tfw just found out denmark doesn't tax gains on cryptocurrency
i guess living in a socialist immigrant hoarding shithole aint so bad sometimes
Juan Barnes
This is very easy goy- bitcoin.tax
You are welcome
Jack Watson
Thanks, I'll be making use of this.
Kevin Murphy
Yeah but how do yobit? Yobit won't doesn't have csv or even let you highlight the trade history to copy paste
