So, we all assume the IBM backed decentralized exchange FairX will be allowing users to buy alt coins directly with fiat using XLM as the trading pair on the backend.
How will this affect capital gains tax? Say I use fiat to buy an altcoin, FairX then converts that into XLM which then uses atomic trading to trade through whatever coins will give the best market exchange rate for the coin you want to buy. On the surface it appear you are just using fiat to buy the coin you want.
But, when you go to cash out to fiat, it will use the same process I assume. So if you held the coin for over a year, will your long term capital gain tax bennefits be wiped out because of the atomic trading and it converting into XLM first?
My question is this -
Landon Hughes
*farts*
Dylan Collins
If I buy a mutual fund, from my perspective it can be a long term gain, despite the fact that the fund manager is trading daily.
It comes down to control.
Tyler Garcia
Mcauley Culkin has aged well.
Camden Cruz
You never own the intermediate object, you sold your shitcoin to FairX for cash.
This will reduce taxable events during cashout by at least 1.
That alone will make FairX the most used exchange in crypto, not even considering the fact that IBM is backing it and they will never ever have server or connectivity issues.
Evan Rivera
How do you think the price for XLM will be affected? Say January 2019.
Jose Thompson
Dont misinterpret me brother, this wasn't an attempt to fud fairx. I cant wait for it to launch as I hold a ton of XLM. Im just curious about long term capital gain tax when it comes to the atomic trading.
Owen Thomas
it will most likely be $10,000 at the very least
Julian Barnes
Fuck that sounds terrible, just sold 65K.
Lincoln Murphy
LOL you are delusional. This is coming from someone who holds a shitton of XLM and would love for that to happen.
Do you have any comprehension of the marketcap required for XLM to hit 10k?
It wont even hit $20. Thats the nature of the game.
Gavin Sanchez
David Schwartz said the upper limit of XRP would be $20 or so. Do you not think XLM has more applicable utility for non financial institutions?
Anthony Jenkins
XLM has a max supply of 103,570,548,975 tokens.
Currently 17,877,208,052 are in circulation. Even if it stayed at this amount of circulating tokens forever (and not the max amount), the market cap for XLM to reach 10k would be 178 TRILLION dollars. I think you can see why thats impossible.
Lincoln Ramirez
Here's two possible interpretations. >Alt->XLM->fiat Alt->XLM has to be broken down to Alt->fiat->XLM, so you get Alt->fiat->XLM->fiat. You pay long-term captial gains on Alt->fiat and short-term capitcal gains on XLM->fiat. However, fiat->XLM and XLM->fiat happen at the same time, so there's no additional profit.
>Alt->fiat You pay long-term capital gains. Both interpretations give the same result.
Nathaniel Brooks
Awesome. Thanks for the clarification on that. But doesn't the atomic trading use more than just XLM if it can get a better price trading through mutliple coins? For example, if it could get a better price going fiat > xlm > eth > altcoin how would that effect the capital gains?
Lincoln Lewis
Bitt Coin hit $20,000 why not XLM? You guys are delusional. It can hit it, too. Bitt Coin isn't special, i saw a documentary on it once that said it could be copied.
Lincoln Clark
I'm an XLMer but it won't ever hit 10,000 because it just has way too many coins in circulation compared to Bitcoin . I'd be lucky we hit 400
Noah Richardson
Bitt coins can be mined. XLM cant. rich people will mine more bitt coins than XLM
Aaron Lee
It doesn't really make a difference and I agree with , since you're not performing the trades. Technically, if you did the trades on a normal exchange, you would have to break it down to fiat->xlm->fiat->eth->fiat->altcoin and determine a fair price (in USD) for xlm and eth during the time of the trade. The net profit, given by fiat->xlm->fiat->eth->fiat, should be almost zero and it gets taxed as short-term capital gains.
Andrew Robinson
This is a common misconception. See my post here (unless youre just trolling)
Adrian Nguyen
Ok good to know, so if I understand you correctly, the IRS only considers it trading if you are manually doing the exchange. Anything automated is still considered long term gain if held over a year? Does this also apply to withdrawing from an index fund?
Jeremiah Wood
You do realize that the dificulty of mining increases, making it basically impossible to ever reach volumes like what XLM offers, right?
Get it in your retarded normie boomer head already, coins with such a volume will NEVER reach the value of Bitcoin, for that to happen Bitcoin had to literally be worth a million per coin. Now get the fuck out back to your Facebook carebaregroup where you shill eachother shitty coins instead of shitting up this place with delusional claims.
LEGIT MAD
Jack Phillips
Everyones gotta start somewhere and learn sometime man, give him a break. I broke it down for him in a post above. We probably all had those same ideas before we did our research. And Im not convinced he wasnt just trolling us ;)
Asher Roberts
I'm not giving anyone a break since posts like these are flooding everywhere, not only here. Tired seeing this crap, it's basic maths.
Dominic Young
I don't know how FairX even works. But you're probably paying a fee for them to convert your $ into an alt. That should be all that matters. I don't know the answer to your other question.
Jordan Ortiz
Even 400 will never happen unfortunately. With the current amount of circulating tokens, the market cap would have to be 7 trillion
I dont think XLM will ever get above $10-20
Joseph Lee
The normie flood is here, time to leave Veeky Forums
Angel Jones
They've been here for over a month.
Jace Gray
I bought in pretty early, and I believe XLM will continue to rise. But I, too, understand the circulating supply would prevent it from reaching BTC heights. But I cannot figure out the price point at which I would be comfortable selling. Since the market is obviously going to continue to grow as more normies adopt it, the market cap COULD (not will, but could) rise pretty fuckin' high on this (and by extension, many) coin. So what price point do you see as a pie-in-the-sky ceiling on this? I peg it at about $15. Thoughts?
Unrelated question for anyone: There is no chance/plans for a token burn of XLM? Could a popular dApp on XLM burn XLM tokens in the future, potentially?
Sebastian Green
Wow you guys have literally no idea how xlm and xrp actually work
The tokens carry information about transactions. This is the fucking function of the token as a technology service.
For example they will carry the information "transfer x value from account y to account z".
People actually believe that a bank will buy billion dollars of xrp/xlm to transfer a billion dollars between two ledgers.
You idiots. You unbelievably stupid morons.
The token transfer merely carries the transaction's information like an eth smart contract carries instructions.
The use of the token for one transaction requires
A, 1 token B, information about a transaction
Using the token Burns a tiny amount of xlm/xrp (which have wat, 12 decimals?) Meaning a single token (representing an instance of exchange on the network) can literally carry billions of different transactions before it is used up.
You only need enough xlm xrp to run your transaction network at peak volumes
The people who believe that Banks will buy billions of tokens are fucking idiots who don't understand how this works
That said hope you are educated now and get those gains before these worthless tokens go to back to sub zero prices
Gavin Myers
>normies adopt it
Fucking delusional
The rocket ship will stall out. $1 maybe, $1.50. then bleed out
Bagholders will get slaughtered
Liam Turner
You misunderstand me, good sir. I mean normies adopting crypto in general will likely pump the entire market. A top 10 coin is always going to be appealing to normies that don't do their research, as evidenced by Ripple's value. They don't care about market research, circulating supply, market cap, etc. That's what I was getting at.
Ian Baker
Thats the medium for what I would predict as well. Anywhere between $10-20
We could be completely wrong though and its market cap could go 2x higher than we anticipate. Pie in the sky best case scenario? $30
Leo Reyes
What's going on right now is a bull run of epic proportions
This is the discovery of gold in the Sierra Nevada, 1849
Austin Baker
I dont see anywhere in this thread where anyone thought banks would buy these tokens. What the fuck are you on about mate?
That being said, it will definitely hit $10
Jordan Scott
what's your selling point then?
Sebastian Miller
Big if true. I don’t know how to deal with this capital gains taxation shit.
Blake Cooper
No matter what method is used, the change is what is taxable. The cost basis for the asset is whatever you payed for it in dollars, no matter how many conversions it took to get there. each swap transfers the cost basis to the next. If this happens instantly, there should be no net gain or loss going from fiat to the desired coin, the only tricky thing would be accounting for the trade. I think most people would just account for it as bought X coin on FairX with cost $. When you cash out, your long term is fine because you only pay 15% (long term) going to XLM and nothing from XLM to fiat (no net gain), because it has been more than a year.
Jacob Rodriguez
I never said it would hit $10K. You said it wouldn't even hit $20, which I think is possible in 2 years or so.
Luke Collins
My mistake, I was confusing you for this guy I think $10 is realistic, $20 on the high end in a few years, and $30 if it takes complete dominance which I highly doubt.
Safe bet is to assume $10 or less. That being said Im holding until at least 2019-2020 regardless.
Jonathan Lopez
Keep in mind this applies only if you held the coin for one year before converting back. If you trade it in the mean time, the timer is reset and tax is calculated on any gains/losses.