Hardly Anyone Is Paying Taxes on Their Bitcoin Gains as Filing Deadline Nears

Megalith

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Credit Karma has revealed that less than 100 people (out of 250,000 filers) have reported their Bitcoin holdings thus far to the IRS, despite the looming April 17 tax filing deadline. Some say that reporting cryptocurrency gains is more complex, so the sparse number is due to stragglers. Others insist that they just don’t care.

"If I had to guess, there's probably a lot of underreporting," said Elizabeth Crouse, a Seattle-based partner at law firm K&L Gates. "Most of the people in the cryptocurrency world tend to have a pretty high risk tolerance." That means they're likely more willing to risk the chance the IRS comes knocking.
 

KazeoHin

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You mean to say nobody is claiming tax on crypto earnings?

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Nebell

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I only cashed in about $4000 from crypto. HODLing the rest. Of course I didn't report. That's MY money.
 

The Cobra

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I actually sold both of my bitcoins back in Dec 2017 when it was at $13,500 per bitcoin. I did report it to the IRS because I don't want those fuckers coming after me. I paid at the 15% Capgains rate because I purchased both coins in 2010 for a $1 each and it is viewed as a long term investment. I was able to recover most of the money back in taxes because of loopholes and other various stuff with the tax code and also my home mortgage deduction.

Looking back I should of taken my friend advice and purchased $100 worth of coins when he asked me too. Ugh :-P
 

quiktake

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I am pretty smart with taxes, but calculating taxes for crypto (or any capital gains related item) using first in first out is pretty tricky depending on the number of trades you have done and requires research. Turbotax is crap giving any help for this. I eventually went to bitcoin.tax and paid them some money for piece of mind. They have been around for five years and make importing account data easy. They then export to file format that can be uploaded into Turbotax or H&R Block. Way easier than doing it manually. Now that I can see what the final results are supposed to look like, I might try doing it all by myself next year.
 

vegeta535

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I can't wait for all th crypto pricks to get bent over by the IRS. Given how underfunded they are and the scale of crypto mining is a lot will not get audited. Knowing my luck they going to get me for $150 I mined at the begining of the year out of curiosity.
 

DukenukemX

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I think that's one of the reasons why people do the crypto thing, to avoid paying taxes, among other things. But that's not much different than Apple moving their money to another country to dodge taxes, but somehow we're alright with this.

 

Mega6

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People do the "Crypto Thing" because they want to make money. Taxes? Maybe before Uncle Sam ever heard of BTC, not any more. There exists stock funds based on BTC that will generally give you the same result. GBTC comes to mind.
 
D

Deleted member 93354

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People who hate government's control of money not reporting earnings on a coin designed to buck the system. Imagine the f*ck that?! Shocked, truly I am.

After watching Congress with Zuckerberg, I just want to start drinking every time Washington tries to legislate anything electronic.

I was talking to my wife last night and I told her these old farts don't have a clue [about the digital world]. That is why they are politicians and not techs.

My wife said, "That's why they have aides to educate them."

Me: "Their aides. They can barely run their email. That is the blind leading the blind."

Trying to tax crypto is going to be a farce and I knew it would be.
 
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Mega6

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Crypto is handled pretty much as capital gains in stocks are. This is just adding BTC to the bucket of stocks and applying existing laws. Not re-inventing the wheel here. If you can think of a tax, there are people trying to avoid it. So forget bank transactions for example. Most Crypto companies online also report tax information.
 

_l_

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just saw a news report on CBS online. It said hackers who lock up Government and corporate computers and then demand a ransom are demanding payment in BITCOIN only.

This is definitely NOT going to end well folks.

Between criminals using Bitcoin and people not paying taxes I'm preparing for $250 GTX 1070's to flood ebay in the near future once President Trump cracks down on Bitcoin use in the USA and other Countries will follow suite.
 

Gorankar

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Treat bought/sold coins like you would capital gains. A ledger with date of purchase, purchase price, date of sale, sale price, is all you really need.
Treat coins you mined yourself like income/stock option, record date mined, value day mined, (pay income taxes on that amount), date sold, sale price, (pay taxes/claim losses on difference).
Treat any fees the same as you would an expense.

I am not really seeing the difficulty in this.
If people want to buck the system, that is their business, but claiming it is too difficult is ridiculous, unless they are too lazy or too stupid to record the transactions for tax purposes.
The people that work for the IRS do not have a sense of humor, nor are they the forgiving sort. Just an FYI.
 

Mega6

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just saw a news report on CBS online. It said hackers who lock up Government and corporate computers and then demand a ransom are demanding payment in BITCOIN only.
This is definitely NOT going to end well folks.
Between criminals using Bitcoin and people not paying taxes I'm preparing for $250 GTX 1070's to flood ebay in the near future once President Trump cracks down on Bitcoin use in the USA and other Countries will follow suite.
Hmm breaking news hackers like BTC. You are like 15 years too late on that one. Crack down all you want while using the same technology to reinvent banking transactions among all the other hundreds, thousands of potential benefiting areas now being researched. Real Breaking News: Blockchain Technology. The whole idea of BTC is independence from the same organizations wishing to regulate it and take their piece plus use its technology for their own benefit..
 

noko

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Credit Karma has revealed that less than 100 people (out of 250,000 filers) have reported their Bitcoin holdings thus far to the IRS, despite the looming April 17 tax filing deadline. Some say that reporting cryptocurrency gains is more complex, so the sparse number is due to stragglers. Others insist that they just don’t care.

"If I had to guess, there's probably a lot of underreporting," said Elizabeth Crouse, a Seattle-based partner at law firm K&L Gates. "Most of the people in the cryptocurrency world tend to have a pretty high risk tolerance." That means they're likely more willing to risk the chance the IRS comes knocking.
What does that mean Bitcoin holdings? Do one inform IRS bank account holdings? I am assuming it should read Crypto Currency holdings. Anyways I reported 100% all of my mining rewards or earn income and paid tax on it. Hard to believe if I am 1 of 100. I should only have to claim earn income when I use or exchange it now plus any new mining income.

Clearer IRS information, instructions and also enforcement looks like it will be needed. I have no clue on what one is suppose to claim on anything in a foreign country with totally different rules/laws/regulation -> Looks like regulation may have to form consensus between the nations as well. As long as there is an internet there will be Cryptocurrency. Lately Crypto currency is making a come back and it is strong so far -> which actually typical starts around this time frame, peaks in June/July falls and then comes back stronger Nov/Dec/Jan.
 

MRAB54

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I converted a mined litecoin to bitcoin and then deposited that into an online sports betting establishment. I then promptly lost my sports bets soooo no taxes ;)
 

hlfbkd420

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Not sure what the problem is... I paid taxes on mining and sales.. I only mine with 3 rigs.. Recorded all my transactions... Was pretty easy. I don't trade though... I don't want to do that much paperwork.
 

risc

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Don't care, more money in private hands means more will exchange to other private hands.

Individuals drive the economy, with some exceptions government is a cancerous and polluted drain on all our time/energy/productivity.
 

DocNo

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just saw a news report on CBS online. It said hackers who lock up Government and corporate computers and then demand a ransom are demanding payment in BITCOIN only.

And anyone who pays should be fired. If you have proper backup/disaster recovery processes and procedures ransomware should be at most an annoyance, not blindly sending money to someone anonymously and hope they respond with a key that works (good luck with that - thieves are thieves for a reason).
 

Gorankar

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Don't care, more money in private hands means more will exchange to other private hands.

Individuals drive the economy, with some exceptions government is a cancerous and polluted drain on all our time/energy/productivity.
By that token criminals drive our economy.
In any case, I am pretty anti tax, but at the same time I recognize that some taxation is required, (for roads/fire/law enforcement/military/etc), and that people should pay according to the laws we have in place. If someone in the US earned/traded cryptocurrencies and made a profit, they should pay their taxes same as anyone else. Why do some people think cryptocurrency is special in this regard?
 
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