Quick question for people based in USA who actually pay their taxes.
Are you allowed to switch methods midway or after specific tax years?
Like if I wanted to use specific identification of shares because I kept coins in a separate wallet to minimize tax could I default to FIFO next year?
I just want to sell my most expensive coins first. But the rest of my coins are lumped together.
Its total capital gains afaik, (I'm not a tax expert)
So it doesn't matter what or where, just totals, as in how much gain/loss
Yes OP, you can change methods from year to year.
>I'm not a tax expert
That's very obvious when you don't even know how different methods of identification effect your tax liability.
What if I sell 2 different coins. Can I use specific share identification for one coin and then regular FIFO for the other coin?
Your method needs to be consistent in the same tax year, so you can't just switch from FIFO to LIFO. That said with specific identification there's nothing stopping you from just identifying the first coin you bought as part of a sell.
What if I didn't know I was supposed to calculate my taxes on every single trade in 2013-2014 and made a few trades I didn't calculate or report. I never cashed out any money into my bank account, I just bought and sold on exchanges and between alt coins. When / if I do cash out these coins how do I not get myself in trouble?
You neglected to point out that while you can change methods, you retain the basis as calculated by the prior basis. So if you use average cost for a trade, then all your shares of that security will have then a basis at the average cost -- even those shares not involved in the trade.
Capital gains (or losses) aren't dependant on whether you withdrew the money or not. So you're already in violation of tax laws if you failed to report gains.
If you want to comply with the law, you'd need to file amended returns for the prior years.
>inb4 people tell you not to do that because you'll never get caught -- you didn't ask how to cheat; you asked how to stay out of trouble
lmao at you tax paying cucks KEK
Not IRS here. Can I get your name, address, annual income for reseach purposes?
Can I still use specific identification of shares if the shares of the coins accidentally get mixed with some other coin. Like if I bought 5 3 and 5 to make a stack of 10. Is there any way to sell the middle 3 if I wasn't able to put it in its own wallet in time.
Is the IRS going to know they got mixed?
Jeez, the IRS will never be able to know about your crypto coins even if they confiscate your PC (granted that you store them right)
Are you fucking stupid to declare them? You could as well declare Counter Strike points, this is just ridiculous
Crypto gains are taxed when you convert them to USD
Willingly avoiding paying taxes on your crypto gains is tax evasion and punishable by jail time
Avoiding paying taxes on your Counter Strike points or World of Warcraft gold is considered tax evasion as well, because nothing stops you from exchanging those things for $$$
Your point?
I mean a stack of 13 but you get my point.
I thought I moved things out quick enough but per Coinbase time stamps I received two batches of transactions before I was able to move one out. Now they are technically mixed. I still want to employ the specific share ID method though. Can I just sell the exact number.
Declare everything, be a good boy. Don't forget to declare poops you squeeze out - some people pay for them, so they're fall under capital gains too.
You can't be older than 16, so let me be the first to welcome to you the real world, junior.
Only if you trade them for actual fiat currency, not just USD if I recall correctly, but yeah the profits from the sale of your property is taxable. Technically it doesn't even matter whether the sell itself was legal, once you made a profit the IRS wants its cut.
>if I recall correctly
You do not.
Lying is a sin, Mr. IRS henchman.
Do you WANT to be eternally damned?
How libertarian of the most free cunt in the world...
My taxman only taxes gains on coins you've mined yourself, they really have no clue