US Tax Payers- We're all Fucked! We're not gonna make it!!!

I couldn't fit this into my original post, but the main purpose of the post!!!

EVERY-SINGLE-TRADE you do with BTC or any ALTCOIN is A TAXABLE EVENT!!! YES! THIS IS TRUE!!!

According to a lot of tax attorney websites, every trade is a taxable event, UNLESS you do a 1031 like-kind exchange. But run the serious risk of the IRS saying "no", and forcing you to get an attorney, and then paying the tax with penalty.

>>3374544
Honestly from what I've read the 1031 thing is likely not going to happen. You will most likely have to pay on every single transaction. I'm considering renouncing my citizenship if I make it big.

>>3374544
stfu this is old news

>>3374544
What is trustless exchanges and exchanges that don't take KYC information for 500 Alex

The fact that you mongs didn't use BTCE or currently EtherDelta to move tokens makes me believe you are all fucking retarded.

When you are read to sell, move your tokens to a big boy exchange like GDAX, liquidate, tell your CPA it is long term hold, pay your quarterly taxes on 15%.

How the fuck are you guys so dense?

>>3374584
it's not really, becuase we still havn't heard from people how they're handling their taxes. I'm using this to get answers and tips from people so we can actually move forward instead of FUDING and complaining about the us government.

>>3374544
>>3374561
We're all aware of this OP. If you make enough money you're most likely going to have to get out of the US or start doing shady shit to move your money back into fiat if that's what you really want.

be sure to be far af from usa when I make it

>>3374544

How about US residents who are not citizens?

>>3374544


MY PLAN:

I got into crypto this year. 100% of my crypto gains this year will be taxable & short term gains. I also mined some crypto. I'll calculate total mined coin value. Then, I'm going to transact my full stack @ year end into BTC. The difference between mined proceeds and full stack value (roughly 66% of my stack is gains) will be short term capital gains and the remainder will be property.

I'll pay taxes on all of it and expect to be audited.

I will also write off all of my mining rigs and the electricity (I track each rig's consumption at the wall with a WEMO) as business expenses to offset the taxes. So far my cost is ~$8,500 and ny stack is 10k.

I'm expecting to pay $1,000-2,000 in crypto taxes once the dust settles.

Well worth it, IMO.

>>3374544
>>3374561
>must be treated as first in first out
>1031 not allowed
FUCKING HELL., so we're getting fucked both ways?

Talked to my accountant.

He said it doesn't matter until the IRS has finalized what their regulations for crypto.

>>3374597
IRS can use public blockchain, and prove it was a long term hold.

If you're audited, then you're really fucked, because then they could simply say you're laundering.

Unless you know something about IRS law that we don't? Is the burden of proof on them or us?

>>3374613
Exactly, they have given no clarification on what people can or cannot do and they still haven't after years.

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>>3374544
Just hold until the government finally gets its butt in gear. Keep as complete records as you can just in case. If you have to fudge the numbers a bit to make them work, how are they ever going to prove it?

Also, vote Trump 2020, because even if he doesn't get around to it you can bet the Dems are slavering to hand out your magic internet money.

>>3374612
>FIFO
Damn, there goes another couple of grand toward taxes come April

>>3374615
The burden of proof is on them, how the fuck are they gonna use the public blockchain to fucking know if you moved ETH out of EtherDelta into Exodus into LTC into GDAX. You wanna be doubly fucking retarded? Move it out of GDAX into your own wallet and move it back into GDAX.

The IRS cares about getting its cut, doesn't matter the slice as long as it is believable. Been cashing about almost 100k every quarter since early 2016 when we started picking up steam with altcoins.

My CPA doesn't really give a shit as long as I pay my quarterly taxes in the correct amount.

>>3374561
huh? It's a basis swap. One property for another.

>>3374610
its still a form of income. US citizens are slaves. Talk to an accountant.

I read about this last night too, in case I wanted to get out of the country, since I am first generation citizen, my parent's country grants me citizenship to their birth country-- this was my plan.

According to US law, they will still find you, and force the country to give you up. Most foreign banks dont like dealing with americans becuase of the insane paperwork required due to Sep 11th bullshit and money laundering. So you're fucked either way.

Find an accountant.

>>3374561
What kind of things should I be tracking for taxes? The rate of exchange at the time of the transaction? Amounts? Etc?

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>>3374639

You smaht, you loyal, you grateful... I 'preciate dat.

>>3374634
At this point I'm saying fuck it and doing specific identification anyways, bitcoin.tax allows it and at worst I'd just owe back taxes.

>>3374621
Damn right I will. I'll take Trump over the sociopath retards or cucked neocons any day.

>>3374639
Write a detailed tutorial and post this method. I like you, despite you talking to me like I'm a piece of shit...it actually almost gives me a boner.

This is by far the best advice!

>>3374659
yes the rate of every altcoin/bitcoin at the time of trade.

If you have less than 200 trades, start bookkeeping for free on bitcoin.tax or cointracking.info.

I really like cointracking.info because it is incredibly detailed.

>>3374613
>it doesn't matter
What doesn't? Taxation on bitcoin/altcoin trades? It's safe to just pay capital gains?

>>3374735
Yes just file a capital gains 1040 Schedule D.

>>3374700
Because BTCE is gone, it is mostly reliant on shit tokens,

Move shit into Exodus Wallet, pay the fee, convert to ETH, move to some Ether Wallet, buy ICO, or shitokens off EtherDelta or some other trustless exchange that does not take KYC information, convert back to ETH on EtherDelta, move back to your Ether Wallet, swap Exodus token addresses for whatever you want to convert back into, swap for LTC/BTC, move into personal wallet, move into GDAX, sell, or remove from GDAX and hold it for some random period of time you wanna hold crypto for.

15% is helluva lot cheaper then paying 35% gains. It is more believable you are some autistic fuck who bought a bunch of magic internet money for pennies then some shrewd altcoin trading Leonardo DiCaprio wannabe.

>>3374561
>EVERY-SINGLE-TRADE you do with BTC or any ALTCOIN is A TAXABLE EVENT!!! YES! THIS IS TRUE!!!
Lol that's so unreasonable. I've made hundreds to thousands of trades. Half of them I can't even remember. How the fuck am I supposed to pay my taxes?

>>3374731
Bittrex and Coinbase/GDAX provide full transaction history in an excel spreadsheet. I dunno about other exchanges, but that's only a few steps removed from ctrl+v-ing in some equations that do all the work for you if you're really that worried about it.

>>3374735
That because there is no IRS clarification on intangible property AKA crypto AKA they don't know what to do so they called it property and want it taxed as such but left it an incredibly grey area, if your attorney can do a 1031 exchange they can.

Investopedia article is saying we're not limited to FIFO. Thank the gods for that, it would have quintupled my tax liability if we were.
http://www.investopedia.com/university/definitive-bitcoin-tax-guide-dont-let-irs-snow-you/definitive-bitcoin-tax-guide-chapter-1-trading-gains-and-losses-c-lifo-fifo-offsetting-lots.asp

>>3374765
IRS is the final boss, not the Chinese.

>>3374731
The rate of change of the currency involved (e.g. trading ethereum for bitcoin) or the rate of change per USD?

If the former, I'd have to know how that transfers to US dollars anyway right?

I have made over 100 trades none have net me over 10k fuck off

>>3374798
It is gains/losses in USD

>>3374561
>EVERY-SINGLE-TRADE you do with BTC or any ALTCOIN is A TAXABLE EVENT!!! YES! THIS IS TRUE!!!

You're fucking retarded if you believe this is true. Who is going to track my exchanges on Shapeshift, exactly? How are they going to tell how much Monero I have? Even gov't fucking monkeys know they can't regulate this shit even if they wanted to and there's profit in it if they use it themselves.

I wish this FUD would go away.

>>3374815
So it doesn't matter if BTC was traded for ETH? Only money gained or loss when USD was involved?

>>3374651

Corporate taxfag here and I agree with you.

When it comes down to it, the IRS expects a reasonable amount of your profit and it's your duty as a US citizen to provide that to "your best effort." Come up with a formula as simple or as complex as you'd like, and remember the term "best effort." Worst case scenario, in my opinion, is that they ask you to report it on an amended filing and to do it that way next time. The IRS can be assholes but they are people just like us at the end of the day.

>>3374829
In that case most trades are of no gain or loss, but are equal exchanges...so.....?

>>3374833

Meant to reply to:
>>3374639

>>3374823
I'm not FUDing, man, I'm just looking for what people are doing for their taxes.

I do wish the FUDing would go away.

>>3374836
Are you fucking kidding me, if I bought Ethereum at 100 dollars and traded 1000 Ethereum for Bitcoin with Ethereum priced 1000 dollars, that is 900000 dollars that is a taxable event based on if it was long term or short term supposedly.

But 1031 bypasses this and says they are like kind and when you cash out your one million in Bitcoin into Fiat, that is the taxable event.

>>3374829
If you don't 1031 it this year, you forfeit your right to attempt it in future years, if you do 1031 it then they might reject it anyways. Regardless you have to report it as a 1031 exchange or as a capital gain to stay legal.

>>3374833
>>3374836
On top of that IRS is the only government agency that will literally fuck you in the ass without lube no problem, so give them their reasonable expectation unless you enjoy getting financially raped and maybe prison raped.

>>3374858
You can try it but I'm really not too hopeful on this as they've ruled that gold to silver can't be classified as like kind exchanges.

>>3374883
It is between you, your CPA, and the IRS. This is why I just avoid this step and avoid having an tax footprint all together in cryptospace besides Coinbase/GDAX where I convert to fiat and do "weekly" buys.

why doesnt this work

forget all the different trades just
cash out amount - original investment = net

pay taxes on the net? why isnt the IRS happy this way?

>>3374836
lets put it like this, if they are equal exchanges. then if you go back to holding cash, did you come out with a profit or loss from your original amount ?


Having coin to coin transactions fucks things up royally, since all their values are relative and their values have crazy swings.
To properly count your earnings you might need to know what each coin was worth in some more stable currency (like USD) during the trade.

Like say if you did something like this

day 1 - bought 250 ABC coins for $250 USD
day 7 - Traded 250 ABC coin (now worth $300) for 3,000 CUM coin (worth $300)
You can see here the trade was equal, no different than if you used $100 on the stock market to buy 1x$100 company share
Day 19 - both CUM and ABC tank, You trade your 3,000 CUM coins (worth $150) for 400 ABC coins (worth $150)
At this point your loss is ($50 initial profit - $150 loss )= $100 loss

in this case, you ended up with a loss, even though you have more ABC coins than at the beginning and each trade was of equal worth.

>>3374561
This isn't true
Overly cautious people just think so to remove any chance of pissing off uncle Sam

The safest way to do it is make a chart of profit/loss for each week, totalling each month, and then each financial year
Taxes on profit paid when you withdraw ofc

IRS pls go

either that or you're some sort of accountant/CPA/tax-preparer faggot

every week there's some gayass post on /biz/ about taxes.

fuck off nigger

>>3374639
https://klasing-associates.com/question/who-has-the-burden-of-proof-in-tax-litigation/

http://www.politifact.com/truth-o-meter/statements/2013/may/22/randy-forbes/randy-forbes-says-taxpayer-has-burden-proof-when-f/

sounds like burden of proof is actually on the tax payer.

So when shit like this happens, that's when the public blockchain matters. If you're ever audited, based on what I've read, you're gonna be fucked.

But I hope you're not, nor any other honest person trying to make it big in the cryptosphere.

>>3375034
So...I just need to measure (fiat out - fiat in = gains)...?

>>3375106
as a simple answer, yes.

we can treat your local fiat currency as the measuring stick your coin trades will be measured in.

so are only exchange trades taxable? is a trade on etherdelta/decentralized exchange or ico purchase a taxable event when the exchange takes place on the blockchain?

what happens when we get cross blockchain transactions through something like ARK or Blocknet? Is buying a coffee where you pay with one currency that gets converted to another currency a taxable event?

wat

>>3375171
> is a trade on etherdelta/decentralized exchange or ico purchase a taxable event when the exchange takes place on the blockchain?

if you are trading one coin for another, then that is a taxable event.

> Is buying a coffee where you pay with one currency that gets converted to another currency a taxable event?
No, the payment system operator /retailer would be responsible for that stuff.
if you paid in ARK and they decide to convert it over to BTC and then cash, that is their problem.

>>3375051
Is this how you do it?

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Biz Bros I have good news for you one of your very own is going in to the Tax Business will come back here with all my findings and I may even open up a web site shortly to help out all the Crytponation so be on the look out lets see how bad uncle Sam is going to f us up also I will try to find ways around it I have many connections in that area

>>3375141
Cool. I put $4100 in and my crypto is worth about $20,000 now, so I would pay on taxes $15,900?

>>3375051
>>3375538

This is probably the safest way for the average user. No one cashing out under 100k a year is being looked at yet. The truth is that the IRS just wants its cut as painlessly as possible so they can move on to the next guy, and if you at least make an attempt at openness they're usually willing to work with you. If you're making millions a year from crypto, then you're better off hiring an accountant anyway.

Anyone who says you need to pay for every exchange is getting a chuckle out of the FUD. Trade more than a couple times and you'd end up owing more than you made.

>>3374611
>business expenses
>doesn't operate a business

yeah that's how it works.

holding for over 1yr won't let me file capital gains? it's still income? this is bullshit fuck america desu

>transactions

Good luck. I mined all these coins. Prove I didn't.

>>3375051
>Taxes on profit paid when you withdraw ofc
brainlet. Tax is paid when gains are realized. It doesn't not matter what you do with the gains after that. Burn them. Flush them. or Withdraw them, doesn't matter. The tax is owed when the gain in realized.


>>3374561
>>3374823
>unreasonable
People that trade stock have to list out every buy, sell, cost basis, company, date in, and date out. Do you think that's reasonable for someone with 3,000+ trades? Probably not.

That's why, before computers, people that could afford to invest could also afford to pay an accountant to do their taxes for them. Now, all i have to do is press the "import" button and all of my trades are accounted for. maybe "the future of currency" should catch up.

>>3375627
It is how it works, IRS looks at mining income as self-employment income.

>>3375034
>day 7 - Traded 250 ABC coin (now worth $300) for 3,000 CUM coin (worth $300)
This is you realizing $50 in gains on the ABC coin. The IRS doesn't give a fuck about your funny money. You cannot exchange securities or currencies with each other without realizing gains or losses either.

>>3374602
lol isn't it true
I've been buying gold about 35k worth so far, but still have over 500k floating around in crypto
I pay taxes on my bitpay card deposits, but plan on emigrating to a pro-crypto country to spend the bulk of my gains

fuck, and i thought that getting my green card was a good thing for me. Can i change it for an europe one???