Crypto Taxes Uncertainty

I am a NEET, living with parents that for reasons has several thousand dollars to trade with in crypto. My income tax and short-term capital gains tax bracket is 10%, and 0% long term capgains tax. I am one of the newfags that started trading this summer, and very recently started daytrading into shitcoins.

I wasn't even thinking about the tax issue when I started making lots of trades, shorting this and that, etc.

Am I fucked? I have heard rumors that for taxes you have to have recorded every trade, between coins and coins, coins and dollars, everything, and every transaction is taxed.
Should I just not file a tax report at all since I am not making any income? I don't plan on withdrawing any gains hopefully for at least a year to try and get the 0% long term tax. If I am day-trading does that negate my time towards reaching one-year hold for 0% tax?

Could I just withdraw up to the amount of my capital contributions to the exchanges and not have any issues with "capital gains" if I want to, and wait one year and not have to pay any taxes on my growth that was left in the market?

Thanks for any advice for my clueless 21yr old self.

*edit*
have several thousand dollars of fiat in savings account, in the process of putting/investing into crypto for trading

Capital gains tax is when you cash out.

I don't know where the
>you have to have recorded every trade
meme comes from, but there's nothing backing it up.
Transactions between something like silver and gold are taxed because both have direct value in fiat. That's not the case with alts.

Also, USD tokens aren't USD, so let's say you buy ETH on coinbase and sell on coinbase. The USD you hold there isn't actual fiat, it's just like USDT on an exchange.

I am also wondering about all this, but with European legislation. There is a blind spot in cryptocurrencies, namely how do you prove that your crypto wealth comes from illegal/untaxed activities? You'd need to record every transaction.

Thanks for the insight.
>keep trading

*doesn't come

You should record every transaction, not for tax purposes, but to prove that you aren't laundering drug money. You aren't taxed on every transaction.

just pay the pax you massive nigger faggot, there's no avoiding it, unless you want to sell drugs on the street to launder your money

besides, if you are in the us, if you hold your shit without trading it for a year, you get a reduced tax rate as it would be counted as a longterm investment, i think its only like 15%

tax*

You don't launder money by selling drugs, you spastic. You launder the drug money with some legitimate activity.

>massive nigger faggot
if you read my entire OP you will see that I am not interested in maliciously dodging tax, but rather holding until my 0% long-term rate kicks in, like you suggest.
I was just wondering how trading may affect the realization of the one-year timeline requirement.

do you have any idea or tips as to the best way to go about this? Will Poloniex keep records of all my trades for over a year? Do I have to tediously manually record each trade into a spreadsheet while holding a gun to my head?

This is the only reason to record transactions.

A lot of the times the IRS does want pretty much every transaction, but even a place like coinbase should tell you the taxes you will have to pay when you cash out I think. So you should know ahead of time what you have to show the IRS. Doesn't mean it's taxed.

Gotcha. Thanks senpai

>Capital gains tax is when you cash out.
>I don't know where the
>>you have to have recorded every trade
>meme comes from, but there's nothing backing it up.
It comes from the IRS.

If you trade in under a year, you are by definition not holding for a year. If you claim that you've been holding long-term and the IRS discovers you were weren't, you could get into big trouble for fraud

Gotcha. But if I have, say, a baseline of 10 BTC, and I am trading adding to that value periodically by trading shitcoins in and out of BTC, but I never go below 10 BTC balance for one year, could I claim that I held that baseline 10 BTC enough for long-term capital gains?

Thanks :)

The trading websites keep a record of all your trades you can download a spreadsheet very easily. Remember taxes are for your gains only. So if you spent 1k and end up with 2k and cash it out, only 1k of is taxed. And if you HODL for more than a year you get far less taxes. According to the IRS crypto is property, not fiat.

Also, IRS people are actually pretty nice. If you make an honest, reasonable mistake they don't throw you in jail, you just work it out and pay what you owe. And if you can't afford it, they'll work out a payment plan.

...

oops
pic related

That would have to do with the accounting of defining your lots, referred to as "specific identification". It could be done, but it makes things a lot more complicated because you would need to purchase those 10 BTC in different groups, and define the specific group(s) of BTC used in shitcoin trading. E.g., you buy 2 BTC, 3 BTC, and 5 BTC on slightly different days with slightly different values, you could do all your shitcoin trading with any of the three lots, and declare the others as long-term holds.

>nice people
>payment plan

Pick one and only one.

No they are assholes and this is plain theft.
End of discussion.

>Taxes are theft

found the bootlicker

Eventually this will be easier once more services like TurboTax can connect to popular exchanges.

Paying taxes on stock trades is trivial.

Honestly it's kind of horrible that this burden falls on you, but for now that's the way it is. Good luck figure it all out.

So my USD wallet isn't considered an account?

If you sell stocks or options and that money goes into an online brokerage account, isn't that taxable? I was under the impression they're the same.