Taxes on Cryptocurrency

regk

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Any idea what impact this would have in Canada? Some friends and I are just getting in to crypto and were discussing this...
 

Red Squirrel

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Damn, that sucks, but not surprised. Was a matter of time. Also curious what impact it will have in Canada. This could single handedly cause cryptocurrency to pretty much go to crap as it won't be worth using.

I could understand if they taxed mining profits when you cash in, but taxing transactions too is just retarded. Sometimes you just want to move coin from one wallet to the other.
 
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http://theminersunion.com/2017/09/11/what-you-need-to-know-about-bitcoin-mining-taxes/

Still not sure how you know when your coin gets added to the blockchain if you using a pool?

Can the government track when you actually received the coin? If not, then who cares because you probably don't even have this information yourself, in fact, you probably never even added the coin to the blockchain, because you were only working on a piece of it and were simply paid in bitcoins for the work you did. So then to me, this means, the coin would become income when it actually gets added to your wallet (either on the pool or your personal I have no idea). But since this is a continual thing it's not practical to track, I mean does it have to be a whole coin? What if it's only .02 percent of one? It makes no sense....

How would I know how much electricity I can claim? Especially when electricity is a variable rate? How do I calculate that!?! It would only be possible to do such things as an estimate at best, and even coming up with an estimate is near impossible.
The answer is yes they can, its a public ledger. Every single transaction you've ever done on bitcoin at any amount is permanently stored. They already have tools that tell them who the accounts belong to. That being said the interesting thing is you probably have to write of equipment used for mining if it was prior to this year as it depreciates, so over time. Only equipment bought this year can be fully expensed under new tax law that just passed.

As far as electricity goes just keep this in mind, the is fucked up, but the burden of proof is on YOU not the IRS. So if you can't document what you are writing off don't do it.
https://ttlc.intuit.com/questions/3...e-can-i-write-off-some-of-my-electricity-bill
 

mkrohn

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You guys are worrying too much. Just worry about the final cash out. I doubt irs is gonna waste resources on each trade you made when you are paying right amount of taxes at the final cash out. Stop worrying and pay whatever is necessary when you cash out.
You know thats not a valid defense right?
 

mkrohn

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The answer is yes they can, its a public ledger. Every single transaction you've ever done on bitcoin at any amount is permanently stored. They already have tools that tell them who the accounts belong to. That being said the interesting thing is you probably have to write of equipment used for mining if it was prior to this year as it depreciates, so over time. Only equipment bought this year can be fully expensed under new tax law that just passed.

As far as electricity goes just keep this in mind, the is fucked up, but the burden of proof is on YOU not the IRS. So if you can't document what you are writing off don't do it.
https://ttlc.intuit.com/questions/3...e-can-i-write-off-some-of-my-electricity-bill

I believe schedule C is still going to exist. Business expenses still exist. The personal itemization is going away. If you're doing it as a real business you not only still have the deduction but 20% of the revenue will be tax free through trying to stimulate a small business. IF you're willing to roll the dice on present law and treat this like a traditional business and treat the cashing out as the taxable event.

As for utilities my wife and I also work from home. It goes based on the square footage of your house in use by the work. In a way just pop a mining rig in every room of the house and you're using every room of the house... We could act like trump and abuse the intentions of every part of the law. I personally don't want to risk an audit.
 

Justintoxicated

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The answer is yes they can, its a public ledger. Every single transaction you've ever done on bitcoin at any amount is permanently stored. They already have tools that tell them who the accounts belong to. That being said the interesting thing is you probably have to write of equipment used for mining if it was prior to this year as it depreciates, so over time. Only equipment bought this year can be fully expensed under new tax law that just passed.

As far as electricity goes just keep this in mind, the is fucked up, but the burden of proof is on YOU not the IRS. So if you can't document what you are writing off don't do it.
https://ttlc.intuit.com/questions/3...e-can-i-write-off-some-of-my-electricity-bill
The problem is that you don't get to keep the coins you mined for the coinpool so how does this work?

How can I see which parts of the coins I mined for the coin-pool, and differentiate those from the coins I was paid out from the coin-pool? I would assume that I need to trace each block I worked on individually and record it's value vs what the pool paid me out? But how do I know which blocks I even worked worked on? This does not seem reasonable to me and would make mining impossible.

The tax code seems to assume I am mining my own coins but in reality I only mine tiny fractions of coins that go back to the coinpool which later pays me out. I am supposed to be able to trace what the coinpool is doing? Or do I only care about what actually goes into my wallet?
 
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The problem is that you don't get to keep the coins you mined for the coinpool so how does this work?

How can I see which parts of the coins I mined for the coin-pool, and differentiate those from the coins I was paid out from the coin-pool? I would assume that I need to trace each block I worked on individually and record it's value vs what the pool paid me out? But how do I know which blocks I even worked worked on? This does not seem reasonable to me and would make mining impossible.

The tax code seems to assume I am mining my own coins but in reality I only mine tiny fractions of coins that go back to the coinpool which later pays me out. I am supposed to be able to trace what the coinpool is doing? Or do I only care about what actually goes into my wallet?
So you mined a coin, the coin goes into the coinpool, you get a coin back later or cash value?
edit: or an equivelent amount of coins, but not that coin.
 

Justintoxicated

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So you mined a coin, the coin goes into the coinpool, you get a coin back later or cash value?
edit: or an equivelent amount of coins, but not that coin.

Sorta, it's much more complicated than that, and you don't work on a coin, you work on a piece of a coin called a block. The next block you mine isn't necessarily part of the same coin but it might be or it might not, or it might even be an orphan and not part of any coin. Blocks vary in size and this have different values which take different amounts of time to complete based on complexity. There's also several payout methods and you usually end up with some combination of them.

http://www.etcwiki.org/wiki/Bitcoin:_PPLNS_vs_PPS Theres also RBPPS

Then there are also orphan blocks etc which you don't always get paid out for depending on which payout system you have selected. I really don't think the IRS has any way to keep track of all of this cause I sure don't. Sure the ledger is public but you still have to be able to make sense of what your looking at. I'm not sure the average person has access to this information either without some kinda insider knowledge of how the coinpool is operating. So again, I would imagine none of this matters until you get paid out for your mining since your not actually mining the blocks of the coins for yourself but for the pool, and then the pool pays you out in coins or partials.
https://www.coinotron.com/app?action=homeRewardSystem
 
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Sorta, it's much more complicated than that, and you don't work on a coin, you work on a piece of a coin called a block. The next block you mine isn't necessarily part of the same coin but it might be or it might not, or it might even be an orphan and not part of any coin. Blocks vary in size and this have different values which take different amounts of time to complete based on complexity. There's also several payout methods and you usually end up with some combination of them.

http://www.etcwiki.org/wiki/Bitcoin:_PPLNS_vs_PPS Theres also RBPPS

Then there are also orphan blocks etc which you don't always get paid out for depending on which payout system you have selected. I really don't think the IRS has any way to keep track of all of this cause I sure don't. Sure the ledger is public but you still have to be able to make sense of what your looking at. I'm not sure the average person has access to this information either without some kinda insider knowledge of how the coinpool is operating. So again, I would imagine none of this matters until you get paid out for your mining since your not actually mining the blocks of the coins for yourself but for the pool, and then the pool pays you out in coins or partials.
https://www.coinotron.com/app?action=homeRewardSystem
I've tried to get you like a no kidding i know this is right answer, but i can't. What my understanding tells me is that you treat it like a stock asset. You don't actually track individual serial numbers of stocks, you either follow first in first out or first in last out, your purchase price would be $0, your sell price would be whatever it sells at. You flow all this through an llc and you expense your costs appropriately for a home business.

As far as the IRS tracking you: what i dont know is if they have the ability to track when you make a coin. I DO know they can track that you sold a coin (or a piece of one whatever) So if you sold 5 bitcoin for money or exchanged in assets and that doesn't show up on tax return they will know (i don't know what threshold is to care either). The accounting gets really, really hard when you start including barter because you can technically make a profit if you underpaid (exchanged) for a good.
edit: example of this in normal terms would be a pencil normally costs a dollar you find a guy who really needs to sell his pencil you buy it for 50cents, you just made a 50cent profit on paper, this is why when a company talks about "profits" its irrelevant to figuring out if they are actually making money and instead you look at cash flow
 

Red Squirrel

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This is sounding ridiculously complicated, do they expect people to hire accountants just so they can use cryptocurrency? Not that I'm surprised. The government loves to get into every aspect of our lives. When I get my taxes done I just send all the stuff I get in the mail to my tax person to get it done. They are the ones that want the money i should not be the one having to do the work for them. If they want to tax us on crypto well they should have a form that gets sent in the mail, like everything else. Like T4 etc.

Though I wonder if it would make sense to do mining as a business. That way you can write off your equipment. Sounds sketch though, probably not legal.
 

pclausen

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Your friend is going to have to work that out with Coinbase. They have limits on withdrawals that start out fairly low. Higher limits must be applied for.

Yep. I started out with a $7,500 limit on Coinbase, then they increased it to $15,000. I then requested a $100,000 limit, and they gave it to me within a week.
 

noko

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Coinbase just out of the blue gave me a $100,000 limit :nailbiting:, no request on my part.
 

Justintoxicated

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Ok so I need to report when I change one coin for another. but the value of some coins is measure in BTC. So if I change litecoin for BTC which prices do I record I can't grab the price for both as they change by the second so I have to just record what the Litecoin is worth in BTC at the time of the exchange minus the transaction fees? Im trying to figure out how to record all of this stuff. One exchange looks like it could be several hours of paperwork to write down.

Example I have 10 LTC. I need to exchange for BTC so I can buy XRP.

So transfer my LTC to an exchange and pay a transfer fee (need to record this fee)
Next I set my LTC to sell for for .00xxxx BTC so when the price is reached (in BTC) my sell goes through.
This sell is actually 8 transactions with transfer fees paid in some other Crypo. Even though each LTC -> BTC was at the same BTC amount, the value of BTC and LTC can be different for each transaction.

Next I want to buy XRP so I set the amount of BTC I want to buy XRP at. This goes through in 2 more transactions in using another crypto for the transaction fee but it's only recorded a BTC value for the transfer fee. The each of the 2 sales has a different USD value for XRP and BTC but the only thing recorded is the BTC exchange rate.

ok so now I have a total of 13 transfers to make one exchange. How do I record it or even find the USD value of each of these?

Also the closest I can really find on a price at any given time for BTC is by the hour and you have 4 prices HLOC, which one do I use as there is no way to get info for your particular transaction?

Sounds like the IRS wants you to report information that does not even exist? If you never trade out for cash how can they tax is as you never have an exact value.... Average the HLOC for a given one hour increment? use the daily average? I really don't understand all I can really provide them would be an amount in BTC at any given time.
 
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Ok so I need to report when I change one coin for another. but the value of some coins is measure in BTC. So if I change litecoin for BTC which prices do I record I can't grab the price for both as they change by the second so I have to just record what the Litecoin is worth in BTC at the time of the exchange minus the transaction fees? Im trying to figure out how to record all of this stuff. One exchange looks like it could be several hours of paperwork to write down.

Example I have 10 LTC. I need to exchange for BTC so I can buy XRP.

So transfer my LTC to an exchange and pay a transfer fee (need to record this fee)
Next I set my LTC to sell for for .00xxxx BTC so when the price is reached (in BTC) my sell goes through.
This sell is actually 8 transactions with transfer fees paid in some other Crypo. Even though each LTC -> BTC was at the same BTC amount, the value of BTC and LTC can be different for each transaction.

Next I want to buy XRP so I set the amount of BTC I want to buy XRP at. This goes through in 2 more transactions in using another crypto for the transaction fee but it's only recorded a BTC value for the transfer fee. The each of the 2 sales has a different USD value for XRP and BTC but the only thing recorded is the BTC exchange rate.

ok so now I have a total of 13 transfers to make one exchange. How do I record it or even find the USD value of each of these?

Also the closest I can really find on a price at any given time for BTC is by the hour and you have 4 prices HLOC, which one do I use as there is no way to get info for your particular transaction?

Sounds like the IRS wants you to report information that does not even exist? If you never trade out for cash how can they tax is as you never have an exact value.... Average the HLOC for a given one hour increment? use the daily average? I really don't understand all I can really provide them would be an amount in BTC at any given time.
Is the xrp different usd values becauseoftime of purchase? if so, this is just barter, so trace it back to the bitcoin value at the rough time of transaction, as far as getting exact, thats actually on you ( i know that sucks) your technically bartering, if no one keeps track of the data for you, your supposed to write it down.
That being said the data is there: https://www.coindesk.com/price/
 

arnemetis

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So I made my first purchase of btc with $300 usd from coinbase last night, sent it over the gdax and then from there to cryptopia, and bought zcl with the btc. I sure didn't write anything down. I didn't realize I had to record every step of the way, when I bought the zcl it all flashed up in a few transactions quick on cryptopia. Is there anything I need to try and find in the short term before these services don't show me the records? I feel like I'm going to go to jail for not recording all this crap!
 

NKD

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you guys are worrying way too much. Unless you are taking a million dollar profit home in everyday you can record that but not even. Overall net gain and net loss is all that matters. What did you go in with and what did you get out with? Is it a gain or a loss? if its a gain pay taxes on it. or hold that money aside if IRS sends you a notice. I mean I think you guys are making it way more complicated than it has to be. Just look at your initial investment and your overall profit.
 

hlfbkd420

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you guys are worrying way too much. Unless you are taking a million dollar profit home in everyday you can record that but not even. Overall net gain and net loss is all that matters. What did you go in with and what did you get out with? Is it a gain or a loss? if its a gain pay taxes on it. or hold that money aside if IRS sends you a notice. I mean I think you guys are making it way more complicated than it has to be. Just look at your initial investment and your overall profit.

Taxes are hard!
 

w1retap

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you guys are worrying way too much. Unless you are taking a million dollar profit home in everyday you can record that but not even. Overall net gain and net loss is all that matters. What did you go in with and what did you get out with? Is it a gain or a loss? if its a gain pay taxes on it. or hold that money aside if IRS sends you a notice. I mean I think you guys are making it way more complicated than it has to be. Just look at your initial investment and your overall profit.
Until you get audited. Even the revised tax code does not make the proper clarifications and rules for what we're supposed to do.
 

NKD

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Until you get audited. Even the revised tax code does not make the proper clarifications and rules for what we're supposed to do.

Yea you could then you pay them lol. If I know about anything irs is more than happy. They will send you a letter with how much they think you owe. If it sounds about right pay them. To be honest with it's all noise. I honestly don't think they know a way to calculate anything. They expect you to do it and they only good after large accounts. Until coinbase comes out with something similar to stock trading firms that they report to IRS it's gonna be hard. They can check my deposit and withdraw to any account they won't be able to charge me a penny more and couldn't prove it. I think for now they are going after big whales. Not measly few thousand or 10k investment.
 

Red Squirrel

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you guys are worrying way too much. Unless you are taking a million dollar profit home in everyday you can record that but not even. Overall net gain and net loss is all that matters. What did you go in with and what did you get out with? Is it a gain or a loss? if its a gain pay taxes on it. or hold that money aside if IRS sends you a notice. I mean I think you guys are making it way more complicated than it has to be. Just look at your initial investment and your overall profit.

The issue is what does the IRS/CRA care about? If they actually want us to track all this stuff then it will become a huge issue. PRetty much need to hire a team of CPAs just to mine lol. The issue too is that it will make it not worth it as you will end up paying more in taxes than what you make, if you do decide to do it legally.

Personally I'm going to wait till I talk to my tax person to see what she says, or if I hear of someone getting busted. Here in Canada I don't think they will be taxing transactions too though, but I'm not sure. Basically for the time being I'm just going to track the dollar amounts, ex: every time I cash in I will track that. I'm doing it for my own needs anyway so I can get an idea of ROI on my equipment.

If they do end up requiring me to claim it, then I'm just going to register a business, that way I'll be able to write off my costs too.


Do keep in mind that blockchain is public so the IRS/CRA could easily know all your transactions and will bust you for any miscalculations you make. But until I hear of some official word from them I won't fuss too much. IMO if they want money from us then it should work like a job. You should get a T4 in the mail and then you just hand that to your tax person. I find it retarded that they want us to figure it all out ourselves.
 

NKD

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The issue is what does the IRS/CRA care about? If they actually want us to track all this stuff then it will become a huge issue. PRetty much need to hire a team of CPAs just to mine lol. The issue too is that it will make it not worth it as you will end up paying more in taxes than what you make, if you do decide to do it legally.

Personally I'm going to wait till I talk to my tax person to see what she says, or if I hear of someone getting busted. Here in Canada I don't think they will be taxing transactions too though, but I'm not sure. Basically for the time being I'm just going to track the dollar amounts, ex: every time I cash in I will track that. I'm doing it for my own needs anyway so I can get an idea of ROI on my equipment.

If they do end up requiring me to claim it, then I'm just going to register a business, that way I'll be able to write off my costs too.


Do keep in mind that blockchain is public so the IRS/CRA could easily know all your transactions and will bust you for any miscalculations you make. But until I hear of some official word from them I won't fuss too much. IMO if they want money from us then it should work like a job. You should get a T4 in the mail and then you just hand that to your tax person. I find it retarded that they want us to figure it all out ourselves.

True but what is your take home at the end? That is all that matter. Capital gains and capital loss are the same thing so it can go either way. What they ultimately want is money, like goverment, mother fuckers always want money. Any money will be good. Even if they recorded every transaction I made they will see that I didn't really make thousands and thousands in profit. I will happily pay them 2500 on my 10k. The truth is we dont know shit is a bitch to track and if IRS isn't willing to do it then I doubt average joe will. Heck if they say I made a 100k. I would happily ask them how lol! I made some bad moves and I lost and won some. But honestly if they come after me no way in hell I am paying them a cent more than I owe. Like I said they will probably look at your withdrawls from coinbase if you are in the U.S since thats the only way to cash out and will look at the money you have put in and vise versa.

Only going after big fish. They got plenty of other things to do to be honest then go after small fish in the pond.
 

NKD

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https://www.chainalysis.com/

https://www.coindesk.com/irs-using-bitcoin-tracking-software-since-2015/

The next logical extension given that altcoin exchanges do all trades via internal database is to go after them for records (aka, Bittrex and Poloniex in the US). Whether it is this year or in the years to come, expect these exchanges to start reporting transactions to the IRS for US citizens and most likely issue 1099s.

yea true, but it all boils down to profits vs losses. So in the end no matter how many transactions you do, at the end of the year its net loss vs net gain. If you don't withdraw to cash to your bank I doubt, its all about whats sitting there at the end.
 

Red Squirrel

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Do they really care about losses though? They just care that they see money move around, and they want a chunk of it. It's why cashing in more than 10k at a bank raises flags, as the government sees that you somehow got 10k so they want half.

But I guess as mentioned they probably care more about the big fish, so us smaller miners doing less than 1k/month probably don't matter too much. The way I see it, if they want to tax me then find a way to automate it because I'm not doing all the work.
 

NKD

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Do they really care about losses though? They just care that they see money move around, and they want a chunk of it. It's why cashing in more than 10k at a bank raises flags, as the government sees that you somehow got 10k so they want half.

But I guess as mentioned they probably care more about the big fish, so us smaller miners doing less than 1k/month probably don't matter too much. The way I see it, if they want to tax me then find a way to automate it because I'm not doing all the work.

Yes you can claim losses as well. If that can collect on your gains you can also deduct your losses. It's a two way street. That's why it really boils down to how much you invested and how much you withdrew at the end. That's all. That's actually a fair and easy way to calculate it. Now each transaction thing went in to effect this year so I don't have much there. I have been sitting in fiat almost the entire month. When bulls are in control again. I'll get back on and hold. I honestly think that other than some pumps and dumps we will see most major coins follow bitcoin.
 

blade52x

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I can see the IRS trying to audit the following:

1) Cost basis. If you're mining shitcoins and trading for BTC after they get pumped 10-100x, you might as well just save yourself the hassle and report a cost basis of zero. You can't possible owe more money than in a zero cost basis.


2) Not paying your estimated capital gains taxes on time. You're supposed to pay as you go and do this quarterly. The fee is small, and with how volatile crypto is, if it takes you an extra quarter to get 100% back into fiat, then so be it. It's not a big deal unless you do this over many quarters...


Now the one that IS a big deal...

3) Short term vs long term gains. If you don't have records of having held something for a while, this can become problematic. What if you sent Bitcoin around exchanges, and actually traded? Or traded into an alt and then back into more Bitcoin shortly after? Are you still long on the original amount of BTC due to a like kind exchange? And what the new BTC. Cost basis of $0 from that point on? And what if this exchange no longer exists? Your records are gone... I can see the IRS trying to force people into paying the much higher short term gains because of all of this confusion. So what do you do here? Pay what you think you owe (a mix of long term and short term - whatever Bitcoin.tax tells you to) and hope you don't get audited?
 
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NKD

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I can see the IRS trying to audit the following:

1) Cost basis. If you're mining shitcoins and trading for BTC after they get pumped 10-100x, you might as well just save yourself the hassle and report a cost basis of zero. You can't possible owe more money than in a zero cost basis.


2) Not paying your estimated capital gains taxes on time. You're supposed to pay as you go and do this quarterly. The fee is small, and with how volatile crypto is, if it takes you an extra quarter to get 100% back into fiat, then so be it. It's not a big deal unless you do this over many quarters...


Now the one that IS a big deal...

3) Short term vs long term gains. If you don't have records of having held something for a while, this can become problematic. What if you sent Bitcoin around exchanges, and actually traded? Or traded into an alt and then back into more Bitcoin shortly after? Are you still long on the original amount of BTC due to a like kind exchange? And what the new BTC. Cost basis of $0 from that point on? And what if this exchange no longer exists? Your records are gone... I can see the IRS trying to force people into paying the much higher short term gains because of all of this confusion. So what do you do here? Pay what you think you owe (a mix of long term and short term - whatever Bitcoin.tax tells you to) and hope you don't get audited?

What people don't realize is IRS doesnt have the time to deal with the small fish on everything. Let's say they try to take more money from you when you actually made then you got no choice but to fight it. If I had 24k one day and a week later it was 14k I am not paying taxes on 24k that I never deposited back in to my account. They can suck me hard lol. I would spend extra on a laywer then give a dime more room IRS. They want 5k out of 20? Fine. But not until I have 20k profit and I cash out.
 

oblox

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What people don't realize is IRS doesnt have the time to deal with the small fish on everything. Let's say they try to take more money from you when you actually made then you got no choice but to fight it. If I had 24k one day and a week later it was 14k I am not paying taxes on 24k that I never deposited back in to my account. They can suck me hard lol. I would spend extra on a laywer then give a dime more room IRS. They want 5k out of 20? Fine. But not until I have 20k profit and I cash out.

True, you are playing a numbers game, but understand the IRS has a high conviction rate (inclusive of settlements)... additionally, they have the authority to seize assets as well as garnish wages.
 

NKD

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True, you are playing a numbers game, but understand the IRS has a high conviction rate (inclusive of settlements)... additionally, they have the authority to seize assets as well as garnish wages.

Yea man if IRS sends me a letter i owe 50k when I frickin barely deposited back 14k in to my account from coinbase. How do they try to tax the gains I lost? There is no such thing, they can't come after me for the money I never cashed out to my back and lost in the process. It has to be rational it cant be some dumb made up number and they try to take your money. That's why I said they are likely to go after people with large withdrawals back to bank account. They can't hold anything against you becasue in the U.S only way to get money back to your account is coinbase. I can easily prove what was deposited back in to my account from coinbase and how much I actually put in to coinbase. Its simple. If I hopped between exchagnes all the exchange address I sent to are mine and linked to me, so the money just went in to my account and what my real profits are always through coinbase. So yes they can check with coinbase what i put in and what I withdrew and ask me to pay taxes on that.

I honestly think people think IRS are some evil human beings. Every time there has been a mistake on my taxes they only sent me a letter and I paid them if it was correct. My dad owed 10k in taxes due to error in a business from like 10 years back. He was making payments on it and he passed away in 2016 and I got a notice of default and with my moms name on there saying she is gonna have to pay. I talked to the lady that sent the letter and explained to her my moms situation that I am taking care of her and she speaks just enough english to communicate and hasn't worked in 10 years and has been a stay home wife, this was absolute true statement. I read up on it and it was true technically my mom would have had to pay that money and I couldn't believe it. The tax lady asked me for my dads death certificate and asked me to fax it and she will take care of it. I did and its been over a year and I never heard back. I assume she waived the taxes. At the end of the day these people have a heart too, they don't really try to steal money from you that you never owed back or try to go after soemone who is helpless and shouldn't really be responsible.
 

oblox

Gawd
Joined
Nov 27, 2013
Messages
962
Yea man if IRS sends me a letter i owe 50k when I frickin barely deposited back 14k in to my account from coinbase. How do they try to tax the gains I lost? There is no such thing, they can't come after me for the money I never cashed out to my back and lost in the process. It has to be rational it cant be some dumb made up number and they try to take your money. That's why I said they are likely to go after people with large withdrawals back to bank account.

So in your example, selling stock on your Etrade/TDA/Fidelity/etc account, leaving it as a cash balance and not transferring it to your bank account means you don't owe taxes if you have gains? In your situation of having losses, of course you would be offsetting gains...
 

Percy

Gawd
Joined
Sep 27, 2002
Messages
773
All of my crypto activity is in an LLC that files as a pass-through. I run a trade bot that, at times, makes thousands of trades a day.

My accountant told me to not worry about every trade and just call it business income when I cash out to fiat. Trading is just business activity.

I never hold anything long enough for long-term capital gains so whether I track every trade or just call the aggregate income, the result is the same.

What trade bot are you using if you don't mind me asking?
 

noko

Supreme [H]ardness
Joined
Apr 14, 2010
Messages
5,709
Looks like we will have to see how the court cases go with Cryptocurrency. I am sure there will be some this year, actually next year when everything is submitted tax wise. I don't think the government has a good handle on how to tax this.
 

NKD

[H]F Junkie
Joined
Aug 26, 2007
Messages
8,296
So in your example, selling stock on your Etrade/TDA/Fidelity/etc account, leaving it as a cash balance and not transferring it to your bank account means you don't owe taxes if you have gains? In your situation of having losses, of course you would be offsetting gains...

That really depends on how it gets traded. I mean if you leave it in cash at the end of year and they do something like a 1099 may be. I honestly think they report when you withdraw money. Like my fidelity acount, once I had to withdraw money as emergency and I didn't know I was suppose to report it. A year later IRS sent me a notice that I didn't claim that income and I had to pay 1100. Which was fine but I am not too sure if they report that money you haven't withdrawn from the account. Crypto is totally different reason IRS had to fight to get people's names form coinbase. But that was for people who withdrew over 25000 dollars. So its still a crappy game. If they actually knew and tracked these people they wouldn't have to fight coinbase for it. So I don't know if they have the resrouces and time to track every transaction.
 

oblox

Gawd
Joined
Nov 27, 2013
Messages
962
That really depends on how it gets traded. I mean if you leave it in cash at the end of year and they do something like a 1099 may be. I honestly think they report when you withdraw money. Like my fidelity acount, once I had to withdraw money as emergency and I didn't know I was suppose to report it. A year later IRS sent me a notice that I didn't claim that income and I had to pay 1100. Which was fine but I am not too sure if they report that money you haven't withdrawn from the account. Crypto is totally different reason IRS had to fight to get people's names form coinbase. But that was for people who withdrew over 25000 dollars. So its still a crappy game. If they actually knew and tracked these people they wouldn't have to fight coinbase for it. So I don't know if they have the resrouces and time to track every transaction.

Everyone, please do yourself a favor and avoid any tax advice from this guy. I don't know what else to say...
 

NKD

[H]F Junkie
Joined
Aug 26, 2007
Messages
8,296
Everyone, please do yourself a favor and avoid any tax advice from this guy. I don't know what else to say...

lol here comes the guy who assumed i claimed to be a tax advisor. I never claimed to be and nor gave a tax advice. I stated my opinion. Read my damn statement again, does it sound like I am too sure of what might happen? I stated what I did and what I paid. I am always amazed there is always a smart ass that likes to call people out for no damn reason. I never claimed to give any advice. No one knows whit about cryptos thats where the conversation is. IRS has never been a dick to me, may be because I always do the right thing. To be honest with you I have no mother fuckin idea what to pay on cryptos all I know is I didn't make nearly as much as I would have if I sold at the right times. You fuckin telling me I should pay taxes on money that I never had? Yes if you got money sitting in cash at the end of the year and your institution sends a 1099 or something to irs then you will likely pay taxes, it may not happen until you withdraw your profits. It shows clearly I was unsure. At what point I suggested to do what I was unsure about is stupid. Its your fault for assuming I am giving advice. LoL. We just needed someone like you to start shit, thanks.

I never gave you my advice, if you could actually understand what I said you should have known I was unsure. It was very clear. Its your fault for assuming I was advising you. lol I was never talking about stocks and shit. That market is super regulated unlike crypto. But I honestly thought you were asking for my opinion not my advice. If it was a question to trick me in to shit so you could feel how smart you are congratulations! You did it! I will keep to myself how smart I am. No need to brag here.

Here I say it. Everyone please don't take my advice in a web forum to do taxes. There are people for that lol! This was just a fuckin discussion. Jeez.
 
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RevMen

Limp Gawd
Joined
Feb 22, 2004
Messages
460
Nice? I guess. I mean, I had to learn how to write software and learn how to trade cryptocurrencies. It's not like someone just dropped by and handed me a disk.
 

NKD

[H]F Junkie
Joined
Aug 26, 2007
Messages
8,296
Nice? I guess. I mean, I had to learn how to write software and learn how to trade cryptocurrencies. It's not like someone just dropped by and handed me a disk.

I meant that as a compliment man lol. I am surprised you read it otherwise. Sorry you totally took it the opposite way.
 
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