USD stupid tax question threads

i bought shit on coinbase and have been hodling since. do i need to pay taxes?

No. Taxable event is created if you trade from crypto to crypto to cash out. If you just buy ETH on Coinbase and let it sit there you're fine.

Okay OP, I have a question I've been trying to figure out:

Basically, is there only one FIFO queue for one's entire portfolio, across all exchanges, or is a new FIFO queue created on each exchange?

So if I have a bunch of old Bitcoins I bought for dirt cheap on Coinbase, then I take one and start trading it back and forth on Bittrex, does FIFO only trigger once on Coinbase and then now creates a new queue on Bittrex or does it keep necro-ing my old coins on Coinbase even though i am really trading the same Bitcoin back and forth on bittrex and only touched my old stash once?

Thanks.

quads kill the taxmaster

they will likely crisp up all the rules this year and there won't be any interpretation in 2018.

sounds like you didn't give them complete records or had inaccuracies and you are trying to sell more coins than you bought, so they can't match a buy lot with the sell lot

How could the IRS ever find or proove shitcoin to shitcoin trades?

Ok serious question. Been trading since '14. Never paid taxes. Have literally traded to large sums of money, and lost large sums of money, just a vicious cycle. All through this time i've mostly used bittrex and poloniex so my trade history is there, but i've also used other exchanges like cryptsy and mintpal which went under and i have no trading records for.

So let's just say for the sake of it I have $100k of crypto (totally making this up) after having started with $5k worth of Bitcoin bought in 2014 from coinbase and localbitcointalk

WTF do i do with such spotty records.

What if you pull out of the exchange and put it on a paper wallet? Is that taxable?

If evwrything I'm doing, total money in and out, is under 1k, do I have to report it?

No.

Unless it's crypto-crypto or crypto-fiat it's not taxable.

also you should cash out what you need in liquid funds immediately before the prices move or else yes, you'll owe again on a new gain (or take a loss)

never really thought about this but I have no doubt it's a single queue on a per coin basis. doesn't matter where you bought or sold the bitcoin, it's all the same bitcoin. the only thing that matters to the IRS is USD values at the end of the day.

>sounds like you didn't give them complete records or had inaccuracies and you are trying to sell more coins than you bought, so they can't match a buy lot with the sell lot

That error is popping up for ETH purchases on Coinbase, which I have full records of.

>hopefully next year they will exclude reporting of transactions less than $600 in value.

Are IRS fags really going to go after people making a couple hundred $? There are going to be literally hundreds of thousands of cases like that.

hire a professional. for the records you don't have, you'll likely end up having to report a $0 cost basis and pay full tax vs. knowing the cost basis and only paying tax on the gain.

>(all purchasing pools consumed)
well I don't know what to tell you but this means it doesn't have any more coins that you can sell recordwise. you should recheck the amounts of all the buys and sells you entered.

no they are just trying to ease the reporting and recording keeping requirements with that

Oof. Thanks for the answer, I was really hoping that wasn't the case. It means that I necro'd a bunch of Bitcoin unwittingly and have to pay a lot of gains because it bumped me up into the 25% income bracket. Even though I was just trading one BTC back and forth on Bittrex...

Definitely going to get some more consultation on this, I spoke to a tax guy for 10 mins on the phone but he couldn't answer my question.

Thanks bro

Fuck, *everything. Forgive my grammar as well I'm retarded.

If I don't cash to fiat what do I report?

I swapped some of the eth i got from a faucet to btc with shapeshift a while ago, is that gpnna have to be taxed? it was only like 25$

I have no clue about that.

Kinda like a gift? Gifts can be a tax event.

Wrong

What's wrong about it?

how the heck would you report coin to coin, everything else makes sense

You pay taxes if you cash out to fiat...as in through a bank, not coin-to-coin. If this is not the case, provide documentation that shows otherwise. Most of these exchanges use tethers rather than usdt anyways.

they probably won't go after you, but if you make large gains 2 years down the road and never reported anything previous years, you're gonna have a bad time, so yes you should.

nothing if you also didn't trade any altcoins or make any purchases with cryptos, which will both likely qualify as sales of property.

yes, you'll need the USD values and dates of when you bought the ETH vs. when you sold it for BTC. that will be your gain or loss. it's a trade just like on an exchange, just at market price.

it's not wrong. if you don't sell anything (coin to coin or cashout) there's nothing to tax.

read Q-5 in the pdf of the original post. you need to calculate USD values in a consistent manner for each sale. an easy option would probably be to use coinmarketcaps historical graph data for USD values.

if you plan on doing like kind exchanges for all your coin to coin transactions to defer the tax, keep in mind you still have to report them all, and it will likely lead to audit because they will are only going to be allowed to be used on real estate (not crypto sales)

The IRS guidelines say nothing about crypto being like-kind.

>bitcoin.tax
This seems to be the best option. It just calculated all of my bittrex and coinbase trades for free, and the full service is only $20/year. Not bad at all desu.

There is literally no better reason than this to avoid daytrading and just hodl.

tl;dr who cares lol too complicated for me to make sure the Jews get their fare share. Fuck the Jews and fuck the US

yes. my first year I had a trading bot on btc-e and my final tax forms were over 400 pages. luckily I'm a developer and was able to automate most of it. I make much less trades now.

No documentation

I have hundreds of day trades from ETH/BTC... so that is all taxable. Fucking the IRS.

i make about 21k/year
if i hypothetically made $500 on cryptos, would the IRS really bother with fucking me?

No.

there's a new bill going through congress now limit 1031 exchanges to real estate only

im too retarded to understand the pdf
how could i owe tax on a coin to coin trade when by default miner fees mean a net loss in usd

They couldn't

Made a couple thousand off BTC. I’m not paying shit. The fucking normies made people actually start thinking about it.

Alot of bills go through Congress everyday though. I personally doubt any bill will get passed in a Republican Congress that gives the IRS more power to take more money from people.

no but if you make it a few years down the road, you'll be much happier if you have complete records from previous years.

if you bought $100 in bitcoin then the price rose, so you sold it for $200 total value on the ETH/BTC market, you now have $200 worth of ETH and owe tax on $100 of a property gain.

the IRS doesn't care it's not in dollars, they only care that they get paid on the net gain you made. so you need to pay the tax from liquid funds, or cash out what you need to pay it.

it's still not worth the risk because we are all speculating on bubbles, and the IRS will never defer tax on those gains. they might but I wouldn't count on it.

Quick question, so I'm thinking of selling some of my stash, probably about 10k USD worth, and I've been holding for over a year. If I only made a small amount of income this year (about 3k working one job that was temporary) does that mean that I would not have to pay capital gains taxes since I am in the lowest tax bracket? Or is bitcoin considered more like a property and not a stock, meaning I would have to pay taxes even though I had barely any income this year.

ok that makes sense now, so a coin you bought with usd and traded 5 mins later isn’t a taxable event, just needs to be recorded?

how do privacy coins square with reporting?

Reporting altcoin trades is fucking retarded and you know it.

My first month I only had losses so I wouldn't have to report those, but I've since recovered by holding. A couple times I sold peaks and bought back in lower. Do I just need to pay tax on each sale ever since I broke even? For example: buy 5 tokens at 1$, sell at 2$, buy more at 1.5. How do I even pay them?

they probably won't go after you for a couple thousand, but people making 6 figures in profits won't be able to avoid it. it's better to have complete records before you get rich, or else you'll have to go back in fix them. I took losses my first 2 years, but have only 100k in realized and unrealized gains now.

it would be a long term capital asset gain which counts to your tax bracket, so you still report it all but you won't end up owing tax on it if you stay in that bracket. the other 3k will get taxed at your income tax rate, same with any short term capital gains.

it does technically need to be reported, but you probably will have a $0 loss/gain on it because the price won't have a chance to move. it's up to you to report anything taxable or risk the penalties of not reporting.

It is and I hope the IRS changes the rules.

For all you paranoid folks, the IRS doesnt even pursue tax avoidance cases below 70k, as reported by multiple sources. Also, doing any coin to fiat below 10k wont set off alarms either, there are simply too many normies playing with crypto that the IRS doesnt have the time nor resources to pursue every case, especially since they go for easy to track cases of fraud IRL like drug dealers and off shore accounts, etc.

Also, what happens if you pay way more than you need, like just pay 40% on your gains when you convert to fiat. Can you be punished for being lazy and paying too much?

What are the actual penalties?

Have others been fined or jailed? What are the real cases out there? (vs anecdotal advice).

0.1BTC plus tip

you need to report everything, losses and gains. luckily the losses will offset any gains. this is why you need accounting software, it does all those calculations for you.

yes but if you go from rags to riches you'll have a problem once you go to sell and haven't reported anything.

they probably won't audit you but it's not a good practice and will only create problems for you in the future. do it right the first time and you'll never have to fix mistakes of the past.

Alright thanks.

DIE TAXMASTER

Imagine this in court where judges don't even know what bitcoin is, forget an altcoin...

There probably isn't enough crypto experts to even have a court case.

I'm asking for a friend: what if user makes 227k and doesn't report it for the next 2 years.

Then what? They freeze the bank account?

They fine for overdue taxes on crypto in what amount? (Do they have 20 IT specialists to export all transaction history and verify that the exports from exchanges actually match?).

How are you cashing out gains? Exchange or localbtc

Thanks and quick question.

I put in 12k and cashed out 50k.

I wanted to claim long term tax at 15% and say I lost my wallet. In order to prove long term, is burden of proof on the taxpayer?

But then if I claim short term, my capital gains is (50k- 12k = 38k * .25 (my income tax bracket))??

Btw if I held for another 2 weeks it would have been 100k because of the BTC rise. I fell for the tether FUD. None of this matters because I want to kms from these lost gains.

I literally can't pay taxes

I've made THOUSANDS of trades on multiple exchanges. The majority of them were at a loss.

I would have nothing left.

You can owe less taxes if you report losses or something.

My portfolio has only accumulated $300 worth of gains. I haven't cashed out. Is it really worth my time to fill out whatever forms the taxman wants?

the only way? keep making more money see here discord.gg/dwBNmtD

Exactly, if people are cashing out six figures they better damn well pay their tax and take the left over profit, but the nit picky shit with alts and few hundred dollar profits is nothing in the real world. A lot of NEETs need to realize this.

What if I give all my bitcoins to the Red Cross? Will they still pursue fining me? (asking for a friend).

none of you brainlets are actually going to willingly let the government steal your money, right? atomic swaps make it literally impossible for them to tie anything to you

Atomic swaps?

ITT: Op explains everything perfectly and retards are still confused. Bitcoin.tax is $20 well spent.

See

jail isnt fun buddy, better to pay and have records than risk ass rape or bank problems

Look. The key is to pay on what is reported and then some.

Just hire a tax guy and he gives it an OK then if you get audited, you can blame him.

What multiple sources? Also is that under 70k including your income?

I cashed out 50k from Coinbase but made like 40k this year (yes I’m a wagecuck)

So can I get away with not paying?

>Imagine this in court where judges don't even know what bitcoin is, forget an altcoin...
they don't care. they know virtual currencies are property and that's how they will treat them, it doesn't matter they don't what they are and how they work.

it's on you to report. shady records with claims of lost wallets and amounts that don't match (bought 1 BTC and magically sold 5 BTC later on) will likely trigger their alarms. if you can't prove your cost basis you'll likely have to pay full tax.

bitcoin tax doesn't work for trading shitcoins on Liqui

When will they add Binance?

Does anyone fucking Google anymore? If the taxman sees you owe taxes they dont go for the "go to jail" move first, they tell you to pay the fucking money. Less than 2% of all tax avoidance cases end up with someone in jail.

how risky is it to just not report any gains for bitcoin? I'm an under 25k total worth player here

don't know enough about the gift rules, but I assume you'd still owe on the gain or loss of when you gifted it and then could probably claim the donation amount too

maybe you misread the first time. atomic swaps make it LITERALLY. IMPOSSIBLE. for your holdings to be tracked. if you let the government take your crypto gains to give to jamal for his welfare, you are by definition, a cuck

>convert your money to five different privacy coins
>convert it back to BTC
>"sorry mr. IRS I lost all my money on Link."

It's that easy.
DEX/atomic swaps/privacy coins makes it so the government can literally NEVER do anything to stop you.

guys, just don't trade in shitcoins and don't cash out until taxes catch up to the times and make reporting crypto less of a mess. You're looking at about 10 years of investing into crypto. Did you guys think you could just trade in endless pump n dumps and not have the taxman come? You're doing the stupidest shit imaginable, you should have known better. This is why smart investors just invest and forget about it. People who babysit their investments and constantly move things around make a nightmare for themselves with taxation and documentation.

The gov doesn't know how to track or tax bitcoin buys, sells, or trades. They don't know how to go about this. CPA confirms unless you get at 1099 somehow don't worry about it. This guy is just larping and it's pretty sad.

I see.

The 12k cost basis came from the bank though and was deposited into Coinbase. Is that good enough or even that they need to know where THAT 12k came from? It was cash so I mean are they really gonna ask that much?

Or just be like ok this guy paid his taxes like a good guy. Thanks for the $$ and move on? (When there are so many more people evading)

How does the gov know what price you bought or sold at? How do they know someone didn't transfer you money?

have fun cashing out $100k and then trying to spend it

you should hire a professional if you want to deal with lost records properly, I don't know much about that. it's hard enough to do even when you have complete records.

By running through the blockchain ledger if your shitcoin doesn't give full privacy on the transaction.

Another question, say I try and sell btc locally to people in exchange for cash, does depositing cash (probably a max of 1000 or so at a time) into my bank account count as something that can potentially be taxed? Like does a certain amount deposited or multiple deposits raise some sort of red flag?

No, over 10k will though

yes you retard
live off with crypto gains and save all of your job payments. then buy the lambo with that.

From what I've read anything above $10k will auto-trigger the bank to notify the IRS about said transaction.

Look.

They don't get drug dealers when they store the cash under their mattress, but when they drive around with new cars and get a new house.

But I guess you OK just not buying anything.

And I'm not saying you can't buy anything with crypto, I'm saying that stuff gets noticed.

>Skyler, I won it as a Casino!

Good point and that’s what I’m wondering. Are they gonna ask that or just take that I paid and move on? Do they ask about cost basis?