Taxes

So let me get this straight. Let's say you cash out 1 million dollars in crypto and your initial investment was negligible. If you live in the US then you have to pay ~$400,000 in state and federal taxes unless you hold for a year then its ~250,000? Trading your BTC/ETH that you bought with USD for alt coins resets the 1-year timer correct? So after accumulating enough crypto I have to sit on BTC/ETH a full year and hope the market doesn't crash and BTC/ETH are still around to where I can cash out on them otherwise I get fucked by taxes? FUCK

Other urls found in this thread:

cryptocurrencyfacts.com/2017/12/30/the-tax-rules-for-crypto-in-the-u-s-simplified/
youtube.com/watch?v=9pX7IQ6UOVM
investopedia.com/terms/u/unrealizedgain.asp
investopedia.com/taxes/capital-gains-tax-101/
washingtonpost.com/news/the-switch/wp/2014/03/25/got-bitcoins-heres-how-the-irs-says-to-report-them-on-your-tax-return/
forbes.com/sites/robertwood/2017/11/27/tax-bills-doom-tax-free-1031-exchanges-of-cryptocurrency/#41439211f58f
twitter.com/SFWRedditImages

So here's the fun thing with the new taxes. Lets say you have a million dollars in BTC and you trade it for LINK. With the new tax laws, 1031 exemption of "like trades" is gone for crypto, so you now just had capital gains of 1 million dollars.

Cool. Yep, if you cash to FIAT in the next year, you pay a larger sum than if you hold it for more than a year.

Lets say you hold it though and yea your taxes on that amount is $250,000. What happens though if LINK crashes to 0? And now you have nothing at all? You still owe taxes on your capital gains... $250,000.


With the new US tax laws, crypto is now the ONLY investment scheme where you can lose more than you initially invest and be liable for FAR FAR FAR more money than you risked.

Depends on how much your state taxes. Also LTCG is 15% for the first few hundred thousand, it's not like tax brackets mean "you earn X dollars, every dollar gets taxed at the rate for X."

Investing even $1 into crypto now puts you at risk for losing thousands or more depending on how the crypto market does. You could lose your car, house, everything.

This is how they regulate crypto. This is how they kill all the crypto market... by making it too scary and risky to get involved.

Buy Monero and then cash out idiot.

This doesn't sound right, because with the new $1m basis in LINK, you'd deduct the $1m capital loss when it goes to 0.

Oh yeah I completely forgot about the thing where every trade is a taxable event. If you trade altcoins are you pretty much fucked?

you're a fucking moron, capital losses dumbfuck

You have a capital gain of a million dollars, but you also have a capital gain of a million dollars, it's not that hard.

Like Kind was only used in very specific, and autistic, scenarios.

You have nothing to fear. Even with short term capital gains you'll only pay max 35%.

This is max level FUD.

fuck that. I will never pay taxes on this. fuck trump. fuck them all.

Hmm

you fucking moron lmao
thats one of the stupidest things i've ever read on Veeky Forums

NOTHING HAS CHANGED. I REPEAT, NOTHING HAS CHANGED. You were supposed to be paying taxes on crypto since 2014; when it was classified as property. Crypto trades were never like-kind. Like-kind wouldn't stand up in court since most coins/tokens have different use-cases. The new law just clarifies that like-kind only applies to real estate. The IRS just hasn't bothered to track down crypto investors at this time.

fucking this

Taxes are theft. Fuck the IRS.

Just fudge the books what are they going to do subpoena a chink exchange? Haha holy shit.

hope you like jamal 9 inches deep you reddit browsing felon

what about those debit cards that do the conversion at the moment of the transaction? i'll just hold all of my value in btc, and only pay taxes when i spend.

cryptocurrencyfacts.com/2017/12/30/the-tax-rules-for-crypto-in-the-u-s-simplified/

"WARNING: If you make great gains this year on-paper, but then crypto goes to heck next year, you could end up owing a ton of money to the IRS you don’t have. You could run into real problems if crypto goes to zero (very unlikely) or if you panic and sell low. Seek guidance from a professional before making rash moves. "

What are you talking about? You only pay taxes if you made money. Do people really not understand how income tax works.

Hope they add more USD trading pairs to altcoins in the future so you wont have to wait a year in BTC/ETH/LTC to get the long term rates

Crypto -> Crypto trades are a taxable event. Not just cashing out for USD.

Capital loss is capped at $3000

How do I include fees when filing for taxes? Do I just put in my initial as (initial-minus fees) or is my initial just straight initial and fees are subtracted from my gains/losses?

Capital gains tax only applies to the gains... not the principal. You will only ever be taxed on the profit that you make. You can't lose more than your original investment via taxes

Yes but only if you made money.
If you buy 1 btc at 16000
trade 1 btc - alt when it's under 16000

You don't pay any tax since you "sold" btc at a loss

Yeah, but what I'm worried about is if they ask you for you to provide proof of all your trades and where you got all your money. I doubt they'd do any investigating themselves

It's called Capital GAINS tax you fucking idiots.

Log all your transactions and daily gains/losses. It's not hard.

tax: (sum(max(0, sell - buy)) + max(-3000, sum(min(0, sell - buy))) * tax_rate

If you think you got it bad, Get ready to see what happens to anyone who created forked coins like BCH. Or created new coins like Ripple.

Capital gains on crypto basically fucks the existence of ALL PRE-MINED COINS. I still have not got a straight answer from people right now.

Capital gains means that Ripple and any forked coin are instant jail sentences for the creators. You will never be able to pay the taxes on those coins because of how insane it would be to do. Ripple is especially in trouble because they open a 1 billion coin escrow every month.

There is no way that capital gains can be done on crypto without completely destroying a huge majority of the coins. Satoshi was smart as fuck when he decided to hide.

When the fuck are people going to realize the impending shitstorm this is going to cause?

Buy $1000 BTC, then buy a shit coin for that amount of BTC. If by the time you "sell" your BTC for the shit coin it goes up $1 you pay $.30 in taxes. It's not hard.

>With the new US tax laws, crypto is now the ONLY investment scheme where you can lose more than you initially invest and be liable for FAR FAR FAR more money than you risked.
WRONG.
The same can happen when you trade precious metals or stocks.
Say you have $250000 gains on gold. You trade gold for silver, and then silver drops to nothing. You have the same problem.
This is nothing new. And the recent "change" was just a clarification. Experts have been warning against recording cryptocurrency trades as "like-kind" exchanges.
The moral of the story is not to throw your money away on something that will be dumped.

That is why you calculate cash out and set aside the taxes you owe by Dec 31st. Nothing actually changed this year, like kind was never intended for crypto and the current rules are from 2014.

Don't forget, anyone who mines crypto and sells it is actually a felon

see: youtube.com/watch?v=9pX7IQ6UOVM

Lmao in Canada I only have to pay 15%

>When the fuck are people going to realize the impending shitstorm this is going to cause?

YOU DO NOT PAY TAXES ON UNREALIZED GAINS (GAINS ON PAPER)

YOU DO NOT PAY TAXES ON UNREALIZED GAINS (GAINS ON PAPER)

YOU DO NOT PAY TAXES ON UNREALIZED GAINS (GAINS ON PAPER)

YOU DO NOT PAY TAXES ON UNREALIZED GAINS (GAINS ON PAPER)

YOU DO NOT PAY TAXES ON UNREALIZED GAINS (GAINS ON PAPER)

imagine the shitstorm if they taxed tea 2%.
same thing.

digital vs organic usa vs britain.

against all odds...look at the gains.

-no federal income tax
-have to live there for 6 months out of the year
-warm weather
-great food
-qts literally everywhere
-gated communities so you literally dont have to learn spanish if thats not your thing
-already inexpensive real estate made cheaper by recent natural disaster
-can still be american

is anyone planning on moving to puerto rico once they make it or something similar?

discuss

if you are in the 10 to 15% tax bracket, from my understanding if you hold for over one year you dont have to pay any capital gains tax.

I would have each of you check your bracket and states tax code.

It’s going to take PR decades to recover idiot
You’re going to be down there in your gay boomer tier gated community while outside hundreds of thousands of brown people are living in dilapidated tin shacks

This is what trump proposes. less brackets, simpler.

Nobody fucking cares about poorfags here. We're talking about crypto millionaires.

fucking misinformation, if LINK crashes to 0 you pay nothing because those gains were UNREALIZED (gains on paper)

You ONLY pay taxes on realized gains (when you convert to USD)

The reason why the Tax law is fucking retarded is because they are treating crypto like assets, when in reality crypto is currency, not an asset. The whole point of crypto is its a replacement for fiat.

All that the IRS and the government is doing is pushing people to adopt crypto even faster and to actively use crypto for transactions, so they dont have to pay the retarded tax to convert to fiat.

But you will NOT have to pay unrealized gains. It works the same way as stocks.

Everyone here is probably going to have to pay the 35% anyway, even if its a zero cost basis. The thing is, our gains are so high, that the zero cost basis (assuming that it cost you $0 to invest) is a minimal penalty because our gains are so fucking high.

Well if you were smart... youd quit your dayjob for a year. No income, file as 10%. 0% capital gains tax. But yeah continue to larp as a millionaire instead. Much easier

Yeah and I'll only be able to cash out on 1% of my portfolio. Whoop de doo. By the time I'm done I'll be over 100 years old.

Como Esta Amigo Estoy el readio
How's my spic talk ?

i don't know why, but anytime someone uses the word "dilapidated" i piss my pants laughing.

He's talking about buying LINK WITH realized gains.
When you barter cryptocurrency for another property when the cryptocurrency gained in value, then that counts as a realized gain, because you are using your gain's purchasing power.

Then everything in crypto is unrealized gains until I cash out. Easy as that.

Once I have all my gains in Monero, how the fuck do I cash out?

Buy gold with monero, then pretend you found

Except that is wrong, you sell crypto every time you trade it for another crypto. If you made gains off that transaction you owe taxes on those gains in that year for the fair market value in USD.

>What happens though if LINK crashes to 0

You trade the LINK and realize the loss

just spit balling, bud. no need to get edgy

enjoy getting buttfucked by uncle sam paying for those poor refugees and niggers

Loss is capped to $3000 per year unless you are a daytrader.
>What happens though if LINK crashes to 0
This is like asking "What happens if I put all of my wage into bitcoin and it crashes to 0?"
Yes, you will get taxed, even though you have no spare change.
Invest carefully and don't gamble away your gains. Or you can do .

Except for the problem that this is not feasible at all and it would destroy coins like Ripple or Bitcoin gold. It also makes it absolutely fucking insane to own a Steemit account as well because it does hundreds of transactions a day easily.

Ripple. the company opens up 1 billion dollars of coins that they have full control over every month and them reinvests them into an escrow when done. Ripple would owe taxes on 1 billion coins a month if this were to be implemented.

Any coin created with pre mined coins that the author has control over would put the creator in a situation where that person is forced to dump all of his coins on the market to pay the huge taxes.

Satoshi Nakamoto owes insane amount of taxes right now. If the fucker ever did show up he would be tossed in jail instantly if he didnt dump huge amounts of BTC on the market to pay his taxes.

There is no fucking way taxes on this shit is going to be a thing. It sounds possible on some levels but it would destroy crypto.

For example:
If you trade Bitcoin for Ethereum, that is a barter transaction and you are liable for all capital gains at that point in time.

You are buying cryptocurrency using a different cryptocurrency, this is not a like-kind transaction. You must pay.

If you don't want to pay capital gains, just hodl. Alternatively, have a full time job like a normal fucking person and just pay the tax, if you lose then you can get a break later on if you have investments or buy/sell a house.

Not paying your taxes is just going to fuck you over when the government realizes it. Not only will you have to pay the taxes, you will have to pay, what, .5% a month? Compound interest will FUCK you.

No retard capital losses offset capital gains retard.

No, because you cash out whatever small amount you're worth to realize your net loss. This loss cancels out your previous gains. Unless you are completely fucking your tax forms, you will owe the tax rate for whatever your realized GAINS end up being.

Literally ALL YOU HAVE TO DO IS CASH OUT YOUR TAX LIABILITY AT 12/31. It's so fucking simple. That avoids having gains/losses in separate years.

And like kind was NEVER allowed for crypto. I hope yall aren't ever audited.

a crypto to crypto trade, like trading btc for link or eth or anything else, is a realized gain.

>Any coin created with pre mined coins that the author has control over would put the creator in a situation where that person is forced to dump all of his coins on the market to pay the huge taxes.
What are you talking about? You only pay taxes on your gains. What makes you think that a coin author has to sell all of his coins to pay taxes?

>s cancels out your previous gains. Unless you are completely fucking your tax forms, you will owe the tax rate for whatever your realized GAINS end up being.
>>>
>Anonymous (ID: 811dvaS/) 01/07/18(Sun)21:05:03 No.6071828▶
>File: 1515174392414.png (752 KB, 606x1069)
>752 KB
> Literally ALL YOU HAVE TO DO IS CASH OUT YOUR TAX LIABILITY AT 12/31. It's so fucking simple. That avoids having gains/losses in separate years.
> And like kind was NEVER allowed for crypto. I hope yall aren't ever audited.


Losses aren't capped to $3000 only losses MORE than gains are capped.

LOSSES FULLY FUCKING NET AGAINST GAINS YOU FUCKING RETARDS HOW ARE YOU ALL SO FUCKING STUPID HOLY FUCKING SHIT

A fucking leaf!

If the author owns those coins those are his gains. Satoshi nakomoto owes taxes on his Bitcoins.

It would destroy Bitcoin instantly if he was forced to pay it all off.

And I repeat, CASH OUT AT 12/31 FOR TAXES THIS WORKS THE EXACT SAME WAY AS STOCKS.

THE ONLY WAY THIS SCENARIO HAPPENS IS IF YOURE LITERALLY A MOUTHBREATHING RETARD

love all this FUD from whales hoping to buy

its called BASIS and yes if you made money and trade out, you pay tax on the % earned when you sold for a new coin

No it's not. The amount that asset went up before you went from BTC to LINK is a realized gain.

He doesn't owe anything unless he trades his coins for something, and he would only owe a percentage of his profits.

I was mistaken. So in the example above, you can sell off the LINK to realize losses. But watch out for the wash sale rule.

It's funny that Veeky Forums, a site populated by socialist are finally understanding that taxes = theft now that they finally stand a chance of making some money sitting in their parents basements.

i will tell you what some people i know are doing, and that is you don't pay any taxes, if at some point you get audited, you say sorry, take fine, take assessment, you will have made exponential gains on all of what you would have paid in taxes anyway, then write a check for back taxes and penalties with millions in the bank to spare from holding the taxes for uncle sam

>It's funny that Veeky Forums, a site populated by socialist
lol

>He's talking about buying LINK WITH realized gains.
No he's not. It's unrealized until its cashed out to fiat.

>When you barter cryptocurrency for another property when the cryptocurrency gained in value, then that counts as a realized gain, because you are using your gain's purchasing power.

Wrong wrong wrong. Its only a realized gain when its converte to fiat otherwise its...drumroll....unrealized gains!

i think you got it the other way around

It makes bar far the most sense to me that you only pay taxes on what you cash out, Paying taxes on unrealized gains is fucking weird as shit.

"Hey man, you are expected to tangible this untagible bro."

You are wrong. IRS says so. Forbes says so. bitcoin.tax says so. cointracking.info says so.
Cryptocurrency is property for tax purposes.
Trading cryptocurrency for cryptocurrency is barter.
BARTER IS TAXED.
For example, IRS taxes trade of gold for silver, if you have gained value on gold.

Wrong. Its unrealized gains until you cash out to fiat.

read: investopedia.com/terms/u/unrealizedgain.asp

>IRS says so (wrong)
>Forbes says so (wrong)
>bitcoin.tax says so (wrong)
>cointracking (wrong)

No, its your interpretation that's wrong. The government does not tax unrealized gains. Thats why they are called "unrealized".It's not income from capital gains until its cashed out for fiat (the position is closed)

read brainlet investopedia.com/terms/u/unrealizedgain.asp

>For example, IRS taxes trade of gold for silver, if you have gained value on gold.

That's cool for gold and silver. What do you do when its thousands of transactions a week? Its literally impossible to track this shit.

Does the IRS bother to go after every stripper making 120k a year in one dollar bills? You might hear some stories but the vast majority dont.

This is that but even worse. its completely insane.

>the IRS's interpretation doesn't matter, mine does
Good luck, user

>>That's cool for gold and silver. What do you do when its thousands of transactions a week? Its literally impossible to track this shit.
And its 100% on you to keep track of it. They can hit you with whatever htey want and its on you to prove you did nothing wrong

The IRS will have to start accepting bitcoin as payment or other coin like .gov coin

So never cashing ouy is the answer and just be drug dealer rich?

All crypto is property you mongoloid

You gave something that gained in value in exchange for something else.
That is a barter.
You just realized your gains in order to make a trade.
Doesn't matter if you traded real estate, precious metal, stocks, cryptocurrency. If you trade one thing for another, that is a barter, and barter is taxed.
There's no need to argue about it. Just go to irs.gov and read about how cryptocurrency is property for tax purposes, and how barter is taxed.
If you think it's ambiguous, use the web search engines and search for "cryptocurrency tax" to find easy-to-read clarifications published by business journals and blogs.
They all say the same thing.

You keep saying its an unrealized gain despite the fact that everything say crypto to crypto is a property trade which is a REALIZED gain.

You cant just pick and choose which laws you want to apply to which situations benefit you

aksually you are going to aksually get raped in prison by jamal if you think this way

It does make sense when the IRS is fucking retarded and they have no idea what they are walking into this year. People are going to dump massive piles of paperwork on the IRS. Shipping boxes and boxes. hundreds of pounds of papers with millions of transactions. No human will be able to deal with it.

It will be amazing. If the IRS says that water isn't wet, anyone who knows what water is will point and laugh.

how do you cash out with monero? just stay in monero ?

Its on you to prove you did nothing illegal user :)

I hope to GOD this fucking happens. Those mouthbreathing IRS cunts can all go suck on chode.

This, pls answer. Everyone says blahblahblah monero then nothing else.

If the IRS was smart they would remove the tax for crypto. The make a USD crypto coin. Then force all businesses and exchanges to buy a small percentage of USD coin for every single transaction.

Reminder that if you buy anything with crypto you are expected to pay sales tax too :)

yeah its called sending them all the paperwork proving you did nothing wrong and tell them to look through them

I've got all my trades logged so far, do you user?

They already deal with stock trades. I think they're up to the task.
Don't be criminal scum. Pay your taxes.

You're all a bunch of morons, jesus

THIS IS WHAT THE IRS SAYS YOU DUMBFUCKS

investopedia.com/taxes/capital-gains-tax-101/

"As a general rule, you don't pay any tax until you've realized a gain. After all, you need to receive the cash made from selling at least part of your investment in order to pay any tax."

Crypto is taxed just like Stocks: washingtonpost.com/news/the-switch/wp/2014/03/25/got-bitcoins-heres-how-the-irs-says-to-report-them-on-your-tax-return/

Fucking brainlets.

>The IRS says cryptocurrency is property not currency, so you might think you could qualify. But whether 1031 applies to cryptocurrency is debatable. Some tax advisers say no, while others offer more positive views, that in some cases 1031 can apply, provided that you are careful. But this debate may not be relevant much longer. Both the House tax bill and the Senate tax bill propose to restrict 1031 exchanges to real estate. The real estate industry is breathing a sigh of relief that 1031 exchanges are being kept for them.

forbes.com/sites/robertwood/2017/11/27/tax-bills-doom-tax-free-1031-exchanges-of-cryptocurrency/#41439211f58f

I hope you have enough gains to pay a CPA user sounds like the IRS is going to rape you real good