Disguising your gains as long term capital gains

In the US all long term capital gains is 0 if you're within the 15% tax bracket but short term capital gains is taxed at regular income. If the IRS were to audit my bank account they would be able to see that I sent money to coinbase but they wouldn't be able to see the short term alt trading gains on poloniex / bittrex / btc-e. Let's say after a year I convert all my gains back to btc, withdraw from coinbase to my bank and tell the IRS it's all long term capital gains. What are the chances that they'll find out about the short term trading at poloniex / bittrex /btc-e? And also what if I tell them the extra bitcoins came from an old mtgox account which is why all the records are gone?

Other urls found in this thread:

irs.gov/pub/irs-drop/n-14-21.pdf
twitter.com/AnonBabble

you do fucking realize the exchanges can and will report your ass if the government asks right? You think they will spend money to defend your privacy or just hand over your records? Which is more likely?

Yeah it's called tax fraud and it's a felony. Just pay your damn taxes on your puny gains.

>15% tax bracket
No wonder you're clueless.

also, trying to outjew the jew. lmao.

Burden of proof is on yourself for deductions including long term capital gains. This is usually accomplished with various forms/receipts (generated by brokerages in case of stocks). If you want to withdraw 30k next year, just put it into btc or eth now, save the receipt and wait for a year. Doubtful that you will need it, but if you get audited and have no proof you will end up owing them.

the real way to disguise ur gains is that once u reached a level of gaind u want to keep, convert to btc, and then always maintain a balanced hedge.

u will win or lose a bit, but this is how you fucking do it

I am a nonresident alien (student) who is taxed at 30%.
Will probably cash out through my home country.

I sold about 100k USD of some shitcoin that I paid 7000 for.

How much will I owe in taxes when I make $55k a year and I'm married? Like 25K Right?

more like 35% of 100k

According to this, it's 25k...

State taxes depending on where you live

Will they go to every exchange and ask them "Hey did so and so trade here?" because for all they know I bought bitcoins at coinbase and sold them at coinbase a year later.
Did I ask what it's called? Fuck off.
Long term capital gains isn't a deduction though. It's just what the tax rate is. So it's short term capital gains until proven otherwise? If a guy bought bitcoins from local bitcoins years ago and has no official receipts what is he supposed to do?

>Will they go to every exchange and ask them "Hey did so and so trade here?" because for all they know I bought bitcoins at coinbase and sold them at coinbase a year later.

I would like to know this too. I think if they wanted to do a thorough ass-fucking of you, they would ask coinbase to show you your records.

If you don't have millions though they probably wouldn't waste their time, because there are much bigger fish to fry

run nigga, they are already coming for your gains

Holy shit, im looking at like 14% on taxes over the 27.5% some fuck's been spamming.

Not true. They have machines scan. My 2016 federal return was withheld for months because I didn't file a return in 2010, because my income for that year was like 13k, 10k of it was capital gains.

>I would like to know this too. I think if they wanted to do a thorough ass-fucking of you, they would ask coinbase to show you your records.

Even if coinbase gave up all my records all they will see is that I bought bitcoins sent them to my wallet. They won't know which exchanges I sent them to or how I traded them or which ICO's I sent eth to or who gave me Nigger coins on the waves platform.

It's most likely not done on an individual basis. Coin base (and all exchanges) probably frequently hands large data directly over. It's just a matter of ctrl f someone's name

>fucking around with potential tax fraud

think i'll pass

tracking the coins wont be the issue they're just going to want some sort of profit earning and check the balances changing on your account.

i'm nowhere close to withdrawing, i haven't looked into it at all, so this might be 100% bullshit

what i read in another thread like this, is that you start a company, transfer all money into company, pay yourself minimum wage, get taxed on that minimum wage bracket, use company to buy shit

again might be 100% bullshit i didn't look into it

No it's only done on an individual basis. They tried to do a summons on coinbase for all user records but got BTFO'd by congress and coinbase.
Yeah if I pay my 0% taxes on "long term gains" under 39,650 and 10% above that. They'll most likely leave me alone right?

I mean 15%*

That would be pointless because short term capital gains is exactly the same rate as income tax and long term capital gains is less.

yeah and why piss off the IRS? Its the governments accountants

Because fuck them.

If I sold $20,000 in bitcoin that I bought a year ago it's 0% taxes if I'm a NEET. But if any time in that year I sold it for a shitcoin and sold it back 1 second later even if I made no profit suddenly I owe thousands of dollars in short term capital gains tax. They won't even clear up if alt-coins are like-kind either. They deserve nothing.

They probably don't even know what alt-coins are.

Wait, each exchange on the exchanges is supposed to be taxed?
Sounds like a waste of paperwork just tax at the withdraw

You're supposed to use exchange data that you download as an excel document to calculate the cost basis then corresponding gain or loss for each trade that you cashed out in a given year.

That way, the cumulative USD gain or loss is taxed.

That's the question a lot of people have, I could see the IRS considering any opening/closing of positions, regardless of the fiat involvement, applicable to capital gains/losses reporting.

Another question is the value placed on it, since all reporting is done in USD, is it the value of the gains/loss at the time a position is closed, converted to USD , (and on which exchanges value ratio) ?

Kek a lot of crypto kids are going to white collar prison this year.

lol no one goes to prison for CGT on $50k

Move to a country with more favorable capital gains taxes which also has a relevant tax treaty covering capital gains (I.e. CGT dependent on residency).

Although here in the UK CGT is 20% though that's only once you go past £10k

>$50k
If that's all I make off of this I'm going to be damn dissapointed.

I've heard mixed things about the whole IRS situation.

Some anons say you only get taxed based off what you cashout into fiat from, say, coinbase to your bank account.

Others say you must record every single transaction you make trading coins on exchanges and get taxed (or get tax deductions) depending on the gain/loss made from those trades.

Which is it? Are we taxed only on fiat payout or are we taxed on each individual transaction/trade?

HAHA FAGGOTS. IN MY COUNTRY WE DONT HAVE CAPITAL GAINZZ

Cant do anythinf without the gubment getting a cut first. Now pay up goyim.

only BTC and USD are recognised as currencies at this stage so you only need to record transactions in and out of those currencies

No they expect you to report EVERY SINGLE TRADE on Form 8949 and gains and losses from trading alt coins all have to be converted to their USD value every time you buy or sell them. At first I thought they might qualify as like-kind exchanges but the IRS will not clarify if they are or not. So even if you didn't even cash out you might owe the IRS USD if you made gains in alt-coins. You'd be forced to either liquidate a portion of your portfolio (and pay more taxes on that portion too) or get money from an outside source to cover the taxes. Nah, fuck them. They're not getting any of that from me. They can have long term capital gains, that's it.

Personally I think the IRS themselves don't know and it's whatever government welfare nig working your case that day decided, they are probably just thrilled you paid them period and as long as it rounds out to 25-35% of what you cashed out in the bank they're probably not going to do a thorough line-by-line examination of your trades.

What country do you live in?

Mitt Romney paid himself minimum wage for this exact loophole.
OP getting fucked by the taxman is not fun, just try to park some in a long term coin to withdraw for spending cash.

BTC is not recognized as a currency. It's considered property. If you trade property for property, the gain or loss has to be converted to it's USD equivalent and reported the IRS even if you never touch dollars.

irs.gov/pub/irs-drop/n-14-21.pdf

>Q-6: Does a taxpayer have gain or loss upon an exchange of virtual currency for other property?
>A-6: Yes. If the fair market value of property received in exchange for virtual currency exceeds the taxpayer’s adjusted basis of the virtual currency, the taxpayer has taxable gain. The taxpayer has a loss if the fair market value of the property received is less than the adjusted basis of the virtual currency.

Exchanging BTC for Nigger coins would be considered "an exchange for other property" and you would have to report your gain or loss in USD terms on form 8949.

here's the thing. I'm interested in this too, but the way shit's going now it will be MINIMUM of a few years before I have cash out money... and that's if all my coinz suddenly go & remain late-May bullish between now and 2020.

By then a lot of things, including laws, will have changed. So i recommend those of you with pathetic less-than-6-digit blockfolios (like me) find something more immediate to worry about.

This is why I'm just trying to long-term hodl coins and missing out on pumps of newer coins because IRS tax laws seem messy. If you have to report taxes on every single transaction, then it's impossible to day trade as a US citizen and you're better off long-term hodling.

But how can buying an altcoin even be counted as a gain or a loss?

If I trade 1000 USD worth of Bitcoin for 1000 USD of Niggercoin, there is no profit or loss, it's just a instant swap for coins of the same value.

That quote literally says you don't consider tax because it's only applicable to property currency (virtual or not).
That said, there is probably a specific clause for property property as well.

I fell for the "You only have to pay taxes when you cash out" meme. I have thousands of pages of trades I'd have to report and I apparently owe thousands of dollars in short term capital gains tax. It's fucking stupid they want money I don't even have because I never sold for dollars. I'd have to liquidate a portion of my portfolio, pay tax on that sale, and then use the remaining USD to pay tax again. Fuck them. I'm just telling them it's all long term gains.

You buy $1000 worth of BTC.
A year later, you use the BTC to buy $5000 worth of niggers.
You have realized a gain of $4000.

What are you talking about? Virtual currency is considered property in their eyes. So trading a virtual currency for property or trading a virtual currency for virtual currency is both considered property property. and you have to convert to USD and pay tax on form 8949

Say you bought or converted $1000 worth of BTC.

That $1,000 worth of btc went up in value to $1,200, so you convert that BTC into $1,200 worth of altcoin

Hoiwever, altcoin value decreases and you tade back to BTC to stop the loss, now you have say $900 worth of BTC reconverted

You would mark the purchase of altcoin as $200 short-term gain, and the trade of altcoin back to BTC as a $300 short-term loss (which can actually be beneficial to you since you can mark that off as a tax deduction most likely)

Oh and I have trades from 2013, I never reported and I'd probably be penalized for that if I started reporting trades now. They fucking RETROACTIVELY made the rules applicable so even if the trades occurred before they released tax guidence you're still on the hook.

Virtual currency is currency.
Property is property.
Bitcoin is property.
Altcoins are(?) virtual currency.

This is why the IRS rules are horseshit, one minute its not a currency, then another its virtual currency, but then the word property is used interchangeably. We really need someone to kick a case up to the Supreme Court on it.

No. Virtual currency is considered PROPERTY.
Property is property.
Bitcoin is property.
Altcoins are property.

It's ALL property. Taxable property.

irs.gov/pub/irs-drop/n-14-21.pdf

>Q-1: How is virtual currency treated for federal tax purposes?
>A-1: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency.

yfw irs jews come to bang you in the ass and you just have to take it.

at least you dont live in commiefornia where they take another 8 -10% cap gains on top of federal cap gains. my ass hurts

The only time it's considered currency is when you sell on Local Bitcoins and suddenly "illegal money transmitter" laws apply and you go to jail.

So why do they use the phrase, "an exchange of virtual currency for other property"

They treat property and virtual currency as two separate things, why isn't it written as "trading virtual currency for virtual currency" or aptly, "property for property"

I still think it's badly written and needs legal challenge from someone with balls. Hell it's not even a law yet but IRS Tsars making up their own guidelines.

Whats the best way to launder cryptocurrency so i dont have to pay taxes?

Asking this question is pointless because you will get both answers here. Or, you'll get one answer but see the opposite brought up again in another thread later on and get confused all over.

I've been there done that for weeks man. Still have no damn clue. Everyone sounds smart that gives answers on both sides.

Clearly there must be SOME answer cause i'm sure there are people who have filed taxes both ways, and it sounds like to me some have made out both ways since everyone gives conflicting information.

It's why I still contend if you are even paying the IRS which so few crypto people do, they probably don't hassle you as much for your history as you think.

That's why I was griping about them not clarifying whether alt-coins are considered like-kind exchanges which would allow you to defer taxes until exchanging to fiat. They've had years to clear this up and they still haven't done it. They probably don't even fucking know what alt-coins are. I'm not even reporting my alt-coin trades. They're only get 2 reports from me. My initial purchase from coinbase and my final sale and I'll pay long-term capital gains tax.

>launder ... so I don't have to pay taxes

its don't

Do I still get taxed if I lose all my money?

No.

irs.gov, bitches. Stop asking questions to the other dipshits on here and just look it up straight from the horse's mouth.

If you want this dipshit's guidance, though. Just make an effort to track the basis and pay what you think you owe. Even if they think you're wrong they won't throw the book at you as long as you've clearly made an effort. All of this shit is just as new for them as it is for us.

If all gains and losses are taxed at the same rate (assuming you aren't a whale), can't you just report the trades and then just take the tax out from the net gain or is there some bullshit where you owe the IRS even if you lost everything?