U.S. Crypto taxes

Only pay tax if you withdraw in usa currency

I can imagine the IRS would some how jail me for Money Laundering, but if what you said it true, thanks you Senpai. I'll reserve a flight to Germany

I think it's asinine that coin to coin transactions are taxed

Does the IRS accept bitcoin? Are they forcing me to cash out to pay the fees on my trades? Do I deduct the transaction fees required to cash out?

...

no they don't accept crypto
you have to cash out to pay coin to coin and then they tax you again cause you just cashed out

What happens if you hold an altcoin for a year? How the hell can you get a long term capital gains tax when you have to convert it to bitcoin to sell for fiat?

Cointracking.info, this isnt a scam right.

If a jew ever tells the truth to the goyim, do they die?

>"Buys" 1BTC worth of ETH
>'taxable event' for $15,000
>immediate expense for $15,050 after transaction fees
>literally showing a loss and $0 taxable income

Bitcoin.tax

I just did mine today, was pretty easy. Had to review everything and make edits as needed / manually input small exchanges. But, well worth it. It seemed to do a good job, only $20. Now I don't have to worry about the IRS pounding my asshole.

we need something that can convert alts directly to fiat

How much did you pay in taxes?

When you make api keys you can give them the ability to trade or not... Don't

how did you make out?

Yeah I heard API key and immediately thought "scam" even though the site looks kind of legit, but I'm a tech brainlet.

Thanks. Fuck it I'll just do it manually. I'm mainly a hodler anyway

definetly not a scam, and this other user is right. They give you specific insturctions on how to deal with the api keys so they only send read-only information. As my portfolio has grown and I have my coins spread out over many exchanges this site has proven very helpful to organize it all. You can also see realized and unrealized gains/losses on your current holdings, etc.

One note: Ku coin does not have read only API access, so you must re-enter the secret key each time, they do not keep it on file. This is a short coming of kucoin, and you can choose to manually enter these trades if you want.

>read only API keys

Thanks mate, I'll look into this then. How much does is cost, like $20? I hate doing taxes even tho about to be a CPA

So basically if you buy $100 of btc then trade it for $120 of eth, you have to pay capital gains on the $20?

Then if you cash it out, is do you have to pay capital gains again?

Plz help a brainlet

Isn't this exactly what everyone is saying ISNT true? wtf is going on here?

Offer to pay in cryptocurrency

Free up to 200 trades, nice!

Invest in an invisible and secure coin like COLX, obviously.

>hi here to do my taxes
>ok have a seat user
>uh do ya'll niggers know to do dis crypto shit
>uhh user I'll check
>loading.exe
>go right on back user
>Hi so it looks like you've had 7000 crypto to >crypto trades the past month
>mfw

You pay tax on the $20 and your new cost basis for the ETH is now $120. So if you sell ETH for $150, then you pay taxes on $30 gain. If you sold ETH for $100, you'd report $20 capital loss which lowers your taxable capital gains, or up to $3,000 off your taxable income if no capital gains, with the rest not utilized able to roll forward to use as a tax benefit in future years

This.

Imagine paying taxes on the trade and the next day the coin crashes. You're fucked. If it increases then you have to pay the difference next year.

Makes no sense.

so I should want to be down in sat value?

All of these funds are already non-qualified. I have recommended self-directed IRAs before and people don't even reply. Not too late to do a prior year and 2018 contribution.

SEPP is fine, but you'd still have to pay a penalty for your lambo distribution.

That's only true after 2018. They changed virtual currency to be defined as "intangible property" and like kind exchanges were re-defined to apply only to "real property" which doesn't apply to intangible property. But all crypto to crypto is like kind exchanges.

You don't pay taxes unless you cash out to USD, retard.

You want to at least 2x every time you trade.

Daytraders are fucked.

good
those degenerates need to learn

There are like-kind taxes on cryptos in the US now.

I think I will just send the IRS a lambo this year and I'll buy an Accord.

Sat value doesnt matter for tax. You'll have to convert each change to what the increase/decrease in fiat was.

So $100 worth of bitcoin sats to $120 appreciation of those sats, traded for $120 worth of ether sats, means just $20 times your capital gains bracket, which is just your highest tax bracket.

Whicj is why long term hodling is legit since long term capital gains tax is significantly lower

But you would have to know the sat value at the time of the trade.

How?

Also, dont forget to add transaction fee and transfer fees,to your cost basis. Thatll make your cost basis higher which means a bit less taxes if a gain

If you actually believe that I hope you never have to cash out a large sum, because the IRS will come fuck your ass and penalize you through the dick hole.

You have to pay taxes on EVERY trade. You bought MEMECOIN with BTC? You'll get taxed on your "Sale" of BTC. When you sell MEMECOIN back for BTC again, you'll get taxed on your sale of MEMECOIN. Then when you finally sell BTC for USD, you will get taxed on that as well.

It's not as bad as it sounds except for the actual tracking of everything... but this is how the tax code works. Don't call people retards when you are the retard, mmk?

*Every trade after Jan 2018

Yes it is but you fucking morons don't know how cost basis works so you think you pay 40% in taxes and lose more than you invest somehow.

The stupidity is mindblowing.

you need earned income to contribute to an IRA

You're a fucking retard, buddy.

That's not how any of this works. It'll still turn out around 30% of your total profits regardless of how often you trade. So many brainlets in these threads

Youd have to look at what the coin was going for at the time you traded it. Can take like an average of the bidding/ask price at the time you traded.

Then look at the cash amount based on the exchange. If there's an odd exchange, youd have to get a fair market value somewhere else like maybe coinbase or something.

So take the 1 BTC = $15,000 for instance, say to divide based on how many sats, = your cost basis. Then bitcoin appreciated to whatever amount, do the same thing at the new price. The ether sats would just be allo ated that $120 amount, or $x every eth sat.

Yeah, i know pretty nuts, but looks like why places like cointracker and such would make it easier, after editing their results for fees/withdrawal depositz from coinbase, etc

I don't even know what to do.

These tax laws start from december 2017 when the bill was signed? When do I start paying the like-kind tax?

I made around 500 trades last year on 6 or 7 different exchanges because I didn't know this was going to be a thing.

Thank fucking god too. I did a bit of trades for kicks on gdax. Although I lost a *ton* back during the first flippening when it dropped from 7 to 5k and sold in case it was actually legitimate. It was a nice wakeup call that most of these flash sales are all just attempts to get people to sell low. I wonder if I can make that towards losses last year and get some money back.

You also add $20 to your ordinary income if it is a short-term realization. You need to be careful. Portions of larger thort-term crypto transactions could be taxed at a higher level if they bump you into the next income tax bracket. If you have a business and have more flexibility with your income it might be wise to make certain trades on lower or higher income years.

People were doing 1031 exchanges on crypto swaps because crypto is considered property. Under an audit, you would most likely be the guinea pig test case for other crypto traders. I personally would not have attempted to do that.

The new tax bill limits this to where you can only do a 1031 on real estate. I think it's only real estate now).

I'm a programmer, not a fucking tax guy but I'm going to have to hire one apparently.

that's asking way too much, especially considering the IRS doesn't even get that information from the exchanges.

GDAX did, but THEY will be the ones who need to provide it to IRS and you

will binance give all their data to the IRS?

Okay guys question. I invested $1200 in 2017. I didn’t cash out, won’t until this year, 2018.
If I’m cool with a cost basis on $0, do I have to even track my trades from last year? I’m at $30k now and honestly don’t want to bother with any of that, I’m fine with giving the irs a few hundred extra. Legal? Ok with sending them zero info about crypto for 2017?

If you dont get a 1099 or sinilar from an exchanve though, youre still responsible from reporting it. Like one user said, they could come back 3 or so years later when better and hit you with a bill PLUS penalties PLUS interest...

I know thats a nuts amount of work for people who made thousands of trades about, but it looks like theres sefvices to simplify it for now like bitcoin.tax and cointracking.info *shrug*

Like kind exchanges have never applied to crypto. You are right, they were dumb to do it. The IRS is going to shit on a lot of people.

Seriously, these brainlets probably have more than me yet don't understand this.

If ordered to, yes. Coinbase turned over information on 14,000 accountholders who had over $20,000+ in profits.

I'd lawyer up and tell the government to prove that my "assts" had a specific value in USD at the time of the exchange. They need to define this shit before they can enforce it and if it takes a court case I'll gladly be the first.

>$0 cost basis
Nigger you have no idea what you are doing do you?

Dude think of the lawyer fees. Not worth it at all amigo.

If you haven't made a trade in a whole year, it's long-term capital gain tax. I think 15% but look it up. You don't pay tax on the amount you put in, just the difference in profit you made when you cashed out. You would likely have to send information on trades to prove this.

If it's less than a year, and you're not a daytrading monkey, just take it out and pay at your highest tax bracket the profit you made since you put in the 1200. So 30-1.2, so 28,000 * [tax bracket]. and add that to the taxes. i'm not a cpa but thats a good start.

expenses cannot be written off

the only thing you can do with that is have a $15,050 cost basis (the transaction fees are added to the cost basis of the coin)

CRA taxes the same way already

From what I understand it would just be my $1200 that they cannot tax. $0 cost basis means they can tax that 1200. So say they tax it as short term it’d be $400-$500 I give them on top of the capital gains right? Or is there more to it that I’m missing?

Long-term cap gains have brackets based off ordinary income. I paid 0% federal in 2016. States vary.

You are missing a lot but I'm bored and do this for a living. Walk me through exactly what you did step by step, hold time, tell me your ordinary income (excluding crypto), and how u file. Ill tell you your federal if u cash rn.

shitty site, apparently you have to pay if you have over 100 transactions (I do)

use only the "View" permission so they can't do trades

he's right, you need to do this

in the US, it's in brackets up to 20% federally (but also state tax often charges for investment income)

if it's short term gains it's taxed like regular income

the higher your cost basis, the better

cost basis is what you bought for, which is $1200

the profit/loss is what you sold for at the time of the sale

>Dude think of the lawyer fees. Not worth it at all amigo.

If you have enough for the IRS to go after you then you have enough for a lawyer

Here we go
>buy btc on coinbase in 2013
>start trading in 2017
>buy more btc
>need to pay for hospital, take out 400
>buy more btc
>still trading between tons of coins
>take out a grand
>now it's tax time

So how do I even determine my initial investment or what is even profit?

It sounds like the only way to do this cleanly is to 100% cash out every year, do the taxes, then reenter.

I would agree, but I don't know that you can claim that they "never" applied to crypto.....I am not aware of a ruling on it. I can't imagine a good CPA making the recommendation though. If you self-prepare and don't complete 8824 then they wouldn't know. However, suddenly having a huge amount of money is a red flag, and in case anyone were to inquire, you would have to produce information. The 1031 thing is a letter of the law versus spirit of the law issue, and, even if you filed a suit to try to claim that certain cryptos should be eligible prior to 2018, they could rule that for instance, because BTC and ETH have different technology, they are not "like".

Don't screw around. Most on Veeky Forums never thought of the tax issue and will be in non-compliance come April 17 (and won't even know it). Once they start plugging these transactions into turbotax or whatever, they are going to owe cash.

You should get another W4 from HR and have them withhold a greater deal of money if you can't manage to keep a savings account.

What’s to stop someone from saying they purchased additional untracked BTC through ATMs and just held to make all their gains? Then you’re into long term gains territory rather than claiming every trade.

Fair. It sounds like he wants to challenge an audit, not a full blown IRS investigation.

You would probably need to find the transactions on the BTC ledger to prove it

Track your cost basis.

Ignore him. He's wrong.

Because the price you sell for into the new currency becomes the cost basis for cashing that out. I.E, made 100k on an altcoin that was sold for bitcoin? That 100k becomes your cost basis.

How the fuck would that work? And what you’re going to print out the blockchain for them?

Heres a question about W4.

Say I want to withhold less taxes in 2018 over time since I'm getting an EV credit and think I'm long termer holding all the coins I have so wont be trading about, just putting more in:

Do I have to wait for the 2018 W4 form to come out? Or can I use the 2017 W4 form and give back to IRS for now? I'm not in tax heh

My understanding, super limited, is that the IRS wants to tax you as much as possible - for your full income tax rate. If you want discounts, you have to prove why you deserve them.

give the 2017 W4 back to HR* I mean, to use for less 2018 federal withholding

Okay, will keep it simple. Income from job about $80k year.
I bought $1200 of ETH in 2017. Traded a lot, value is around $30k now. Have not cashed out.
Plan is to hold all I have for 366 days, cash out dec 31 this year to pay long term cap gains.
Question is, Can I just not report my 2017 trades? I made many multiples of my money, I don’t care about paying tax on the initial $1200 if it means I can avoid tracking the 500 trades I did last year. Thanks for any info.

I guess that makes sense. Sort of have to think of it as guilty until proven innocent.

I have no idea how any of this works. I'm a small fish with a few trades and I'm probably in the loss for all of them. I did go in on LINK and have been continuing to put more money into it - i'm holding those for long gains though so I'm just not gonna worry too much on them.

I guess whatever you cashed out with like coinbase would be able to see the account address you sent from and they could then see every transaction made and tell you are lying.

Theoretically, someone could just find a btc to gold service and then a cash for gold service.

There hasn't been a ruling on it since no CPA is stupid enough to take it to court. It is treated the same way as stock, assuming it was invested and not mined or received as wage/payment.

coinbase has your info

so let's say you bought 1 BTC for $1000

Now it's $1400 and you cash out $400

your cost basis is $1000, and you cashed out 0.286 BTC at $1400 so that's a $400 - $286 (cost of those BTC) = $114 amount that is taxable

under total income of $37k or something like that you pay 0% rate on capital gains, and 15% thereafter up to like $415k

you can read up on cost basis like which coins you use to calculate it for the $400, but you can use FIFO (first in first out) to claim long term gains by cashing in the 2013 coins

short term gains are taxed like income

don't fuck around with the IRS, it's not worth it just to save a few bucks

if you sold when trading, that's "cashing out"

you have to report all your trades and keep track of all of your cost basis and shit

if you have losses, you can deduct them from your taxes

I don't know. I believe whatever form is online is valid at time of use.

irs.gov/forms-pubs/about-notice-1036

There will definitely be changes to the form with the new law though. So I don't know

People who are confused- please just read these two links.
forbes.com/sites/greatspeculations/2017/10/31/smart-tax-accounting-moves-for-cryptocurrency-traders/#29ce40f51c17
irs.gov/instructions/i8949

1. Why would you pay taxes on the 1200 you spent... You don't pay income tax for giving other people money. That is by definition, not capital GAINS

2. They don't just not make you track gains because a year has passed. How would that make any sense? You think if you pay this year you have to track meticulously, but if you pay next year it's just a blank slate?

The intelligence level of your questions makes me think you're larping.

Question to the CPAs in here: you only pay taxes for when you cash out investments, right? I.e. if your investment grows in USD value, you dont pay taxes on the growth until the time you decide to sell it for USD?

DO NOT PAY TAXES ON CRYPTO

THESE TAX THREADS ARE STARTED BY IRS EMPLOYEES AND SHILLS SPREADING FUD

THEY CANT TRACK ANY OF IT AND ARE FREAKING OUT

DO NOT PAY TAXES ON CRYPTO

Ok, thanks for the link too. I guess I'll just wait til whenever its out but I'll read thru that stuff, was just worried it would come out too late to withhold enough in time for 2018 EOY lol

This guy is smart, helpful, and knows his shit. You all should thank him.

Thank u sir

Not a CPA, but as I understand it, trading BTC for ETH counts as "selling" BTC and "buying" ETH as if you made two trades into USD and bought using that USD