Few Americans Reporting Cryptocurrency Gains

FrgMstr

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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.
 

Nukester

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I personally don't know anyone who mines. So that small number doesn't surprise me at all.
 

AaronGant

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Well, the first thing the IRS could do is make it easier to report crypto earnings.

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.
 

Alphawoolf

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Want to get the government involved in your Bitcoin? 'Cause that's how you get the government involved in your Bitcoin.
 

SPARTAN VI

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Well, the first thing the IRS could do is make it easier to report crypto earnings.

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.
 

steakman1971

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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.
 

Rahh

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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.
 

triwolf

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Well, the first thing the IRS could do is make it easier to report crypto earnings.
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.
 

bugleyman

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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?

Agreed. Our tax code is silly.
 
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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?
 

triwolf

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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.
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.
 

triwolf

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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?
Contact a tax lawyer and research online. Don't ignore it if you get audited it will cost you.
 

triwolf

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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.
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.
 

MarkVI

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Contact a tax lawyer and research online. Don't ignore it if you get audited it will cost you.

This. Damages plus interest can be...extensive. Think of all the famous/rich people that the IRS has taken down over the years.
 

sfsuphysics

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Well, the first thing the IRS could do is make it easier to report crypto earnings.
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.
 

viper1152012

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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.
 

AliceCooper

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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.

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?
 
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sfsuphysics

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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.
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.
 

TrailRunner

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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.

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.
 

Snowdensjacket

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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.
 

tetris42

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Good. Taxation is theft.
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?

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.
Please cite me a case in the United States where the government murdered someone for refusal to pay taxes.
 

lilbabycat

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This. Damages plus interest can be...extensive. Think of all the famous/rich people that the IRS has taken down over the years.

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.
 

Retronym

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The most important part of the article:

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

TrailRunner

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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?

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?

Please cite me a case in the United States where the government murdered someone for refusal to pay taxes.

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.
 

Riptide_NVN

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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.
 

rehab

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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.
 

Rahh

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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.
If you didn't cash out when it was over 20k per coin then I feel sorry for you.
 

rehab

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https://www.forbes.com/sites/kellyp...know-about-taxes-cryptocurrency/#3083d744605f


But I don't pay tax unless I actually cash out, right?

Nope. This is one of the problems. You may have a taxable event even if you don't formally cash out. Anyone using cryptocurrency to pay for goods or services must treat each purchase as a sale. Ditto for trading one cryptocurrency for another.* I know there's confusion over this treatment, but think of it like this: If you trade in your Amazon shares for Microsoft shares, that's a taxable transaction, even if you don't take cash out of your brokerage account. Same analysis.
 

whoismoes

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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?!?
 

exiled350

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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.
 
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tetris42

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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?
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.

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.
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.
 

sleepeeg3

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Is the government going to allow deductions for losses? That's the big question.
 
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