Few Americans Reporting Cryptocurrency Gains

Discussion in '[H]ard|OCP Front Page News' started by Kyle_Bennett, Feb 13, 2018.

  1. Kyle_Bennett

    Kyle_Bennett El Chingón Staff Member

    Messages:
    52,864
    Joined:
    May 18, 1997
    File this under "Shocking." It seems that while a survey shows that 57% of cryptocurrency investors and miners realized some sort of gains, not many of those are reporting it to the IRS, only 0.4%. While all the crazy things going on my crypto lately, this alone will likely invite swift regulations to be put in place. Last week we saw, Bitcoin fall below $6000 last week, this week has shown a solid rebound as it is back up to over $8500 according to CoinDesk.

    NEW YORK (Reuters) - Less than 100 people out of the 250,000 individuals who have already filed federal taxes this year through company Credit Karma reported a cryptocurrency transaction to U.S. tax authorities, the company said on Tuesday.
     
  2. Parja

    Parja [H]ardForum Junkie

    Messages:
    12,598
    Joined:
    Oct 4, 2002
    Well, the first thing the IRS could do is make it easier to report crypto earnings.
     
  3. ProfessorUtopia

    ProfessorUtopia [H]Lite

    Messages:
    101
    Joined:
    Aug 12, 2005
  4. Nukester

    Nukester [H]ard|Gawd

    Messages:
    1,286
    Joined:
    Mar 21, 2016
    I personally don't know anyone who mines. So that small number doesn't surprise me at all.
     
  5. AaronGant

    AaronGant Limp Gawd

    Messages:
    374
    Joined:
    Feb 21, 2010
    That's the boat I'm in, trying to figure out how to do this correctly. I got a little bit in 2015 a couple of times just to play around with to see what it was all about and how it would work, moved it around to different wallets, bought a t-shirt, made some donations etc, then what was left just sat around till I made a couple of sales in 2017 since it went so high. I thought I'd just put it down as other income, however after looking into it, seems like that's completely wrong.

    Also apparently when some people made that bitcoin fork that caused me to have a tax liability? I think it's weird that someone can assign something to me, without my consent and I have to pay on it?

    I'm so confused.
     
  6. Alphawoolf

    Alphawoolf n00bie

    Messages:
    27
    Joined:
    Feb 10, 2017
    Want to get the government involved in your Bitcoin? 'Cause that's how you get the government involved in your Bitcoin.
     
    Xinmosni likes this.
  7. alxlwson

    alxlwson You Know Where I Live

    Messages:
    4,967
    Joined:
    Aug 25, 2013
    Capital gains. "Any profit from investments?" Is a question asked in all the tax prep software"
     
    HockeyJon likes this.
  8. SPARTAN VI

    SPARTAN VI [H]ardness Supreme

    Messages:
    6,874
    Joined:
    Jun 12, 2004
    This.

    Unless I'm mistaken, I've read from the IRS docs that they want miners to declare virtual currency that they mined at its value the moment it was earned/mined/paid out. Considering the payouts from pools are variable (e.g. amount threshold) and the wildly volatile rate of crypto... yeah, good luck attaching a value to crypto mined on any given week or day, much less any given hour or minute.
     
    triwolf and Rahh like this.
  9. steakman1971

    steakman1971 [H]ard|Gawd

    Messages:
    2,014
    Joined:
    Nov 22, 2005
    Don't mess with the IRS. I thought I read they were making inquiries to some of the "bitbcoin banks" (not sure what these are called?).

    Would profits (or losses) be treated like stocks or other currencies?

    How many people report out of state sales in which no sales tqx is collected (this is state tax, not IRS)? I'd guess very few.
    For me, I could buy something from NewEgg and don't think I am charged sales tax for my state. If I buy from Amazon, I do get charged sales tax as Amazon has operations in my state. This is kind of a mess as well.
     
  10. bugleyman

    bugleyman [H]ard|Gawd

    Messages:
    1,077
    Joined:
    Oct 27, 2010
    :rolleyes:
     
  11. Rahh

    Rahh [H]ard|Gawd

    Messages:
    1,358
    Joined:
    Jan 14, 2005
    Bitcoin is the riskiest investment ever but those that have money to gamble with could profit from this. I've always followed crypto since the early stages and also follow stocks but with no $ to gamble with the poor get poorer.
     
    KazeoHin likes this.
  12. triwolf

    triwolf Limp Gawd

    Messages:
    504
    Joined:
    Dec 19, 2015
    I agree. I had some very complex taxes a few years ago, contacted the IRS and they were quite confused, and did guide me. I guess it was right? Now you can't even contact them due to cutbacks. Also it seems there are at least a few laws that can be interpreted in certain situations. How exactly do you decide which law to follow? LOL! It's a mess.
     
  13. bugleyman

    bugleyman [H]ard|Gawd

    Messages:
    1,077
    Joined:
    Oct 27, 2010
    Agreed. Our tax code is silly.
     
    craigdt likes this.
  14. Kdawg

    Kdawg Gawd

    Messages:
    816
    Joined:
    Aug 12, 2017
    i don't report the sales tax i don't pay.
     
  15. [21CW]killerofall

    [21CW]killerofall Aliens...

    Messages:
    2,498
    Joined:
    Mar 16, 2006
    With the cut to the IRS funding, you probably won't get audited anyway, but are you willing to risk jail time and/or fines?
     
  16. oldmanbal

    oldmanbal [H]ard|Gawd

    Messages:
    1,585
    Joined:
    Aug 27, 2010
    I mine, nice to meet you new friend. a/s/l?

    Let's be honest, the people using the American Television Advertised Credit Karma as their primary tax filing solution probably aren't the most tech savvy, or money soaked investors dealing in the crypto currency market. The people that rely on a credit score website to do their taxes may not be using bitcoin or crypto for legitimate means anyways, so why would they want to report it. The fact that the entire article is based off of a statistic that tells more about WHO is reporting the .04%, rather than if its an accurate number at all, is more telling than any other relevant information included. Anything past the first paragraph is essentially just speculation and general information about cryptocurrencies.

    It's unfortunate that Headlines like this tend to be the only thing most people see, and instantly absorb it as fact, and maintain it as reality moving ahead.
     
    GoldenTiger likes this.
  17. triwolf

    triwolf Limp Gawd

    Messages:
    504
    Joined:
    Dec 19, 2015
    Yes, and it sure does complicate things if you are a regular Joe, had coins that increased in an incredible way, so whether they ever thought of keeping some back for taxes is unknown. Also you can't pay in Bitcoins, so you have to somehow possibly raise millions of dollars by selling Bitcoins, thus flooding Bitcoin and lowering the value. Really a mess.
     
  18. katanaD

    katanaD [H]ard|Gawd

    Messages:
    1,393
    Joined:
    Nov 15, 2016
    wait.. we are supposed to report income, of any type ???
     
  19. triwolf

    triwolf Limp Gawd

    Messages:
    504
    Joined:
    Dec 19, 2015
    Contact a tax lawyer and research online. Don't ignore it if you get audited it will cost you.
     
    MarkVI likes this.
  20. triwolf

    triwolf Limp Gawd

    Messages:
    504
    Joined:
    Dec 19, 2015
    Save those dollars, at one point a $200 investment turns into millions. It is a bet though, don't gamble more than you are willing to lose.
     
  21. MarkVI

    MarkVI Limp Gawd

    Messages:
    184
    Joined:
    Sep 30, 2014
    This. Damages plus interest can be...extensive. Think of all the famous/rich people that the IRS has taken down over the years.
     
  22. sfsuphysics

    sfsuphysics I don't get it

    Messages:
    12,965
    Joined:
    Jan 14, 2007
    Ask someone who's a day trader and has to manage everything themselves instead of getting mailed a nice 1099 like me who has someone else do his trading, then you got your answer.
     
  23. viper1152012

    viper1152012 Gawd

    Messages:
    748
    Joined:
    Jun 20, 2012
    Why the hell would anyone report mining?

    Just like kids not reporting the lawn mowing buisness they had during the summer or baby sitters.

    If They want to chase that let them, its just another waste or money.
     
  24. AliceCooper

    AliceCooper [H]ard|Gawd

    Messages:
    1,460
    Joined:
    Mar 25, 2007
    I know of some people that are just putting the highest dollar amount the coin was worth the day they received the coins. Granted it is a good way to pay more taxes, if its a low dollar altcoin it shouldn't be that big of a deal to do. Or just sell anything mined short term and it goes into your income. Doing it day by day like you state would be for those who want to keep it long term and avoid short term capital gains tax. EDIT: Or do you have to do it day by day anyways then pay taxes on that amount, then on the short term gains amount?
     
    Last edited: Feb 13, 2018
  25. sfsuphysics

    sfsuphysics I don't get it

    Messages:
    12,965
    Joined:
    Jan 14, 2007
    well if you don't make over $10,400 a year mowing lawns or sitting on babies then you don't need to report anything. But then again there usually isn't a paper (electronic) trail of your income. Now if you have a landscaping company where you're mowing many lawns and are making significant money then why would you report that? Because you have more to lose if you get audited.
     
    GoldenTiger and Parja like this.
  26. TrailRunner

    TrailRunner Limp Gawd

    Messages:
    340
    Joined:
    Feb 15, 2012
    I know too many people who complain about being broke but blow $5k a year easily on smoking & buying useless shit. Some poor people (not saying that you're in this boat) need to stop wasting money and they'd end up not being 'poor'. And 5k a year is insanely easy to save - that just means not doing a pack of cigarettes a day and brewing coffee at home instead of stopping at Dunkin Donuts on the way in to work.
     
    Xinmosni and Parja like this.
  27. Snowdensjacket

    Snowdensjacket Limp Gawd

    Messages:
    179
    Joined:
    Apr 10, 2017
    Super complicated question isn't it? Taxation is theft? We take your money and imprison or kill you if you refuse. You have no choice or we murder you. Sad how dumb people are. Sadder that we are only getting dumber and dumber as well.

    I suppose it's just tired OK to take other people's money and if they refuse to kill them or imprison them. Cause duh.
     
  28. tetris42

    tetris42 2[H]4U

    Messages:
    4,016
    Joined:
    Apr 29, 2014
    Ha, this came up in another thread. When I challenged the assumption, the person went quiet, like it's just a mantra people of a certain dogma repeat. Short version: it's not theft any more than rent is. It's the equivalent of your rent for living in the USA. You've driven on public roads, use municipal water, and enjoy the security of a police force, amongst hundreds of other provisions a functioning society provides. Taxes are your BILL for that. By not paying them and abiding by the laws of the country you live in, YOU commit theft of resources that you've already used. Do you tell your landlord rent is theft also?

    Please cite me a case in the United States where the government murdered someone for refusal to pay taxes.
     
    skiddierow, rgMekanic and bugleyman like this.
  29. lilbabycat

    lilbabycat 2[H]4U

    Messages:
    3,826
    Joined:
    Jun 21, 2011
    The question is though, us guys who made under, lets say, $5,000 in crypto and we only cashed out a portion of that. Is the IRS going to chase me for $1,000 ? Are the penalties + interest significant on $1,000 ? There is a certain threshold where they just won't chase you; just like most cops won't pull you over for going 2mph over the limit on the highway.
     
  30. Retronym

    Retronym Something big is coming.

    Messages:
    23,418
    Joined:
    Mar 5, 2007
    The most important part of the article:

    "The deadline for filing taxes this is year is April 17."
     
  31. TrailRunner

    TrailRunner Limp Gawd

    Messages:
    340
    Joined:
    Feb 15, 2012
    Let's say that I live in an apartment that is reasonably priced. Management decides to hire a doorman, and for that extra service they raise rent. I didn't want a doorman, I can open the door very well by myself, thank you very much, so I decide to find a new apartment. I'm free to do so, and when I move I can take all of my things with me.

    If I decide that tax rates in the USA are too high and I decide to renounce my citizenship, the US government taxes my possessions, forcibly taking a portion of my savings because I want a new landlord who charges less. Isn't that theft?

    If you refuse to pay taxes, you get fined. If you continue, they come to arrest you. If you resist arrest, well, hope for your sake that you're white and not from a poor area.
     
  32. Riptide_NVN

    Riptide_NVN [H]ard|Gawd

    Messages:
    1,731
    Joined:
    Mar 1, 2005
    I'm keeping a ledger of all my payouts and USD value to claim the income next year. I intend to have a CPA do the return.

    Since I'm planning on keeping trades to a bare minimum at least that won't enter the picture much if at all.

    I'd rather not have a potential audit hanging over my head so I'm going to follow the rules.
     
  33. rehab

    rehab Gawd

    Messages:
    759
    Joined:
    Aug 23, 2005
    Im all for following proper tax rules but those that are reporting realized gains before cashing out are absolute cucks. That commodity could literally pull a -100% retrace in a matter of 3 days; Ill report on the end result. Contracking is good software by the way.
     
  34. Rahh

    Rahh [H]ard|Gawd

    Messages:
    1,358
    Joined:
    Jan 14, 2005
    If you didn't cash out when it was over 20k per coin then I feel sorry for you.
     
  35. rehab

    rehab Gawd

    Messages:
    759
    Joined:
    Aug 23, 2005
    Dont...I dont mess with BTC and I am more than flush. :)
     
  36. Digital Viper-X-

    Digital Viper-X- [H]ardForum Junkie

    Messages:
    13,644
    Joined:
    Dec 9, 2000
    At what point is it considered a gain? When you cash out your coins, or when the value goes up?
     
  37. rehab

    rehab Gawd

    Messages:
    759
    Joined:
    Aug 23, 2005
    https://www.forbes.com/sites/kellyp...know-about-taxes-cryptocurrency/#3083d744605f


     
    craigdt likes this.
  38. whoismoes

    whoismoes n00bie

    Messages:
    52
    Joined:
    Jan 27, 2018
    If you do not have an LLC or some other type of incorporation. Crypto mining is considered personal income and taxed at that rate. Please don't forget that you have to pay the 14.5ish % SSN and medicare tax on top if you don't already go over the max of $128K (or whatever it is this year). Even if you do, you have to pay the medicare tax. Technically as soon as you mine the crypto that is considered income. That is too much of a pain to do. I recognize my income from mining monthly on the 28th. I pay my taxes. If you sell the crypto, that is a SECOND taxable event. If you held the crypto for less than 12 months your gains are taxed as personal income. If you held it longer it is capital gains.

    No paying your taxes is stealing, Charging taxes is stealing. Wait?!?
     
  39. exiled350

    exiled350 Limp Gawd

    Messages:
    464
    Joined:
    Jun 26, 2013
    Follow the crypto motto... HODL because as soon as we see XxxUTubeLAMBOboixxX cryptolife productions get an unwanted rectal bifurcation from the IRS, you'll see everyone and their mother looking to claim capital losses on the resulting backslide.

    And to all those taxation is theft people, feel free to find some ungoverned land to set up a new colony. Then let us know how to provide for yourself and citizens with no form of income. Slave labor doesn't work either.
     
    Last edited: Feb 14, 2018
  40. tetris42

    tetris42 2[H]4U

    Messages:
    4,016
    Joined:
    Apr 29, 2014
    Not if it's part of the original terms of your staying there. Stuff like that already happens in the private world. You've never been hit with a fee for leaving a contract early from an internet provider before? Again, the point is you're using at least some of the services and taxes are the fee. You didn't want the doorman, understood, but you WERE living there and paying for that, and the lease with that landlord said you pay an exit fee also. Taxes are very comparable to rent. Now whether they're fair, misused, too high or too low is a completely different issue. But calling them theft doesn't hold up logically since you're directly using what comes from them.

    Well then you're not being shot for refusing to pay taxes, you're being shot for resisting arrest in such a way that the officer is concerned for his life. So yeah, if I want to point a gun at the police and quote the constitution, I won't be shot for quoting the constitution, I'll be shot for pointing a gun at them. Refusal to pay taxes v. resisting arrest are two totally different crimes. No one in the USA has ever been killed for refusing to pay taxes. Trying to conflate the two is just childish. Even completely innocent people understand you shouldn't resist arrest since in order to function the police can't always get permission from suspects to hear their side of the story before doing their job. That's what courts are for. You're right that you will be arrested for refusing to pay taxes, but you'd probably be arrested if you refused to pay rent too and refused to pay the ruling from a small claims court too. It's really not that different.