Question about taxes on crypto. >buy $500 worth of btc >sell

>>3373123
bump, pls halp me accounting bros

>>3373123
>does it count as a loss?
no, you don't claim what you buy. you pay tax on the $1500 you cashed out as you said, buying another $3000 doesn't affect your taxes until you sell it again at either a profit or a loss (or if you buy something with bitcoin directly)

>>3373158
goddamit im fucked

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>>3373123
>paying taxes on btc

>>3373199
This kys

>>3373199

>Wants to be in Tyrone's cell

hf

>>3373158
wait a minute, i thought you just pay taxes on profit earned? they have to account for how much i bought right?

>>3373234
you pay tax on realized profits, aka once you sell. You don't pay income tax when you buy a car, the same is true when you buy a currency.

>>3373234
if you bought for $500 and sold for $2000, that is $1500 realized profit that you have to declare as income at this point

doesnt matter that you bought back in again. once you sell that new holding and realize another gain/loss, then you update your total realized profit number for the year.

>>3373234
Obviously they have to take your initial investment into account, otherwise money laundering would be too easy.

>>3373123
What happens if hypothetically some college student got into eth early this year and bought like 1000 for 5 dollars. Also traded with this eth so he owes short term capital gains. so now there's 330k+ of profits to pay tax on, maybe more. So how does a poorfag like this pay the 25ish% tax on 330,000 USD? No one has 75000 dollars lying around like that

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>>3373285
this is what is confusing because i never just bought one eth and sold that one eth a few days later. i would buy here and there, trade them and return the eth back and sell my initial investment back but i dont know what im doing and i hate being so fucking stupid

>>3373336
>No one has 75000 dollars lying around like that
if he just made $330k, then he does have $75k.

>>3373123
accounting bro says no, it doesn't count as a loss, but it DOES count as a wash sale if it was within 30 days. Wait, no, wash sale rule is only for losses, you're fucked bro.

Unless you have a previous loss you can carry forward...
Although the plus side is if crypto crashes and you lose it all, you can carry back the loss 3 years and recover what you paid in taxes.

Also, it counts as capital gains taxes, not income, as long as you held it for more than a year. The tax rate for that is 0% if you earn under 50k per year.

Going forward, if you are going to dump a bunch of money into it, it might be worth setting up a Roth IRA to speculate with. You won't be able to get the money out without jumping through some hoops, but the gains aren't taxable (because the contributions aren't deductible like they are with normal retirement accts).

>>3373373
Sounds like you had a lot of trades, use bitcoin.tax. It might cost $20 but it'll more than make up for that by letting you import all the data from most exchanges and letting you finish your taxes without needing to go see an accountant.

So, lets say i bought LTC on gdax, then sold it for a profit. then used it to buy ETH. How would they even know i made any money? Do i only have to pay taxes on money that i transfer off of gdax, like to a bank account?

>>3373336
did u cash out already? if not wait a year you'll save so much on tax unlike me. although i dont have nearly that much

>>3373336
You'd have to sell some of your ETH just to pay taxes on the gains. Reminder to never vote democrat if you're not a poorfag.

>>3373406
prrrrreettttyyyy sure that capital gains are a part of your income, thus you must add the gains on TOP of what you make annually. so basically if you're good at crypto trading you end up moving up a tax bracket and paying more taxes

obviously you should speak to a bona fide CPA if you want to be sure

>>3373524
>prrrrreettttyyyy sure that capital gains are a part of your income, thus you must add the gains on TOP of what you make annually. so basically if you're good at crypto trading you end up moving up a tax bracket and paying more taxes
This is absolutely correct.
>you should speak to a CPA
Waste of money for a question that basic.

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>>3373467

coinbase should make available "tax documents" (last year it was just a shitty excel file) sometime early next year that will report every single trade you made

at the bottom it shows your total gain/loss

and yeah, you better fuckin believe that coinbase is sharing this info with the IRS at this stage