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Tax-Free Bitcoin-To-Ether Trading in US to End Under GOP Plan

bloomberg.com

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Re: Tax-Free Bitcoin-To-Ether Trading in US to End Under GOP Plan

#31

Post by Akujin »

This is so ridiculously complicated to the point of next to impossible for a normal person to calculate. Lots of non bitcoin crypto currencies can't even be properly quantified in USD. When there's no exchange that trades said crypto in USD you're then forced to calculate the value based on it's value of bitcoin which can swing wildly from one exchange to another. There's no way to verify any number you put down after the fact as a lot of these exchanges aren't based in the US. Have no reporting mechanism. And is generally a cluster fuck.

So yea that IRS agent doing an audit will in many cases literally have very little to work with. The only thing they will see is you buying bitcoin for X dollars and selling some random crypto 50 trades later for Y dollars. You'd still obviously pay tax on the overall but good luck trying to pin down all the trades in the middle.

Re: Tax-Free Bitcoin-To-Ether Trading in US to End Under GOP Plan

#33

Post by thefreeman »

Are exchanges going to provide us with necessary tax documents in order to pay these taxes? So far all I've found is a terrible csv export that shows the date and amount of purchases of various crypto currencies, but no information at all on the current price at the time of purchase or the amount sold for (this is on Coinbase). I'm starting to get a bit concerned.

Re: Tax-Free Bitcoin-To-Ether Trading in US to End Under GOP Plan

#34

Post by pavlov »

cinquemb wrote: post #29
tomschlick wrote: post #25

Earlier quoted context omitted.

Yup. Remember, it wasn't the police who got Capone, it was the IRS.

So the IRS is going to put the same amount of resources into each of the new mini - Capones as they did Capone?

Capone's transactions were not recorded on a globally distributed immutable ledger.

Re: Tax-Free Bitcoin-To-Ether Trading in US to End Under GOP Plan

#35

Post by fataliss »

thefreeman wrote: post #33

Are exchanges going to provide us with necessary tax documents in order to pay these taxes? So far all I've found is a terrible csv export that shows the date and amount of purchases of various crypto currencies, but no information at all on the current price at the time of purchase or the amount sold for (this is on Coinbase). I'm starting to get a bit concerned.

Technically there are graphs that recorded the history of price at any point in time. So you could fill your taxes even with that poor csv Coinbase gives. Now 100% aboard with you, exchanges need to get on it and deliver us some workable tax documents. It's already enough of a pain as it is now, no need to make my tax season any worse!

Re: Tax-Free Bitcoin-To-Ether Trading in US to End Under GOP Plan

#36

Post by icedchai »

jermaustin1 wrote: post #19
stakecounter wrote: post #11

Is the cost basis calculated by the US dollar value of each at the time of the exchange? Or based on the exchange rate of the two currencies? Scenario: 1. I buy 1 ETH for 1 USD when rates are 1 ETH/USD, 2 ETH/BTC. 2. I trade 1 ETH for 1 BTC when rates are 2 ETH/USD, 1 ETH/BTC. Option 1: I’ve incurred a loss, because the sale is reported as first a sale of ETH for USD, then a purchase of BTC at whatever the cost basis…

It is the exact same as exchanging mutual funds at your brokerage. Like an exchange I did just this morning: $10,000 VHDYX -> $10,000 VFIAX. It creates two orders a sell and a buy. I'm taxed capital gains on the $10k sale (about $600 gain) and the buy has nothing to do with it, until I sell it in 5 years.

The difference is brokerages will actually issue you a 1099 form. The crypto exchange sites won't.

Let's not kid ourselves... Nobody is going to be reporting crypto-to-crypto exchanges.

Re: Tax-Free Bitcoin-To-Ether Trading in US to End Under GOP Plan

#37

Post by xur17 »

thefreeman wrote: post #33

Are exchanges going to provide us with necessary tax documents in order to pay these taxes? So far all I've found is a terrible csv export that shows the date and amount of purchases of various crypto currencies, but no information at all on the current price at the time of purchase or the amount sold for (this is on Coinbase). I'm starting to get a bit concerned.

I'm planning to use either cointracking.info or bitcoin.tax - they accept these exports, and use their own feeds for determining cost basis at purchase time.

Overall I've been pretty dissappointed by the recommendations put out by the IRS - I ended up having to talk to pay to talk to a tax advisor due to the conflicting advice on the internet.

Re: Tax-Free Bitcoin-To-Ether Trading in US to End Under GOP Plan

#38

Post by cinquemb »

pavlov wrote: post #34
cinquemb wrote: post #29

Earlier quoted context omitted.

So the IRS is going to put the same amount of resources into each of the new mini - Capones as they did Capone?

Capone's transactions were not recorded on a globally distributed immutable ledger.

Ahh yes, with a 100% provable 1-to-1 mapping to all US citizen illegal transactions.

Re: Tax-Free Bitcoin-To-Ether Trading in US to End Under GOP Plan

#39

Post by xur17 »

icedchai wrote: post #36
jermaustin1 wrote: post #19

Earlier quoted context omitted.

It is the exact same as exchanging mutual funds at your brokerage. Like an exchange I did just this morning: $10,000 VHDYX -> $10,000 VFIAX. It creates two orders a sell and a buy. I'm taxed capital gains on the $10k sale (about $600 gain) and the buy has nothing to do with it, until I sell it in 5 years.

The difference is brokerages will actually issue you a 1099 form. The crypto exchange sites won't. Let's not kid ourselves... Nobody is going to be reporting crypto-to-crypto exchanges.

If you want to be compliant, and not commit tax fraud, you will. Just because it will require some effort to track you down doesn't make it ok.

Re: Tax-Free Bitcoin-To-Ether Trading in US to End Under GOP Plan

#40

Post by arcticfox »

energybar wrote: post #32
toomuchtodo wrote: post #8

Earlier quoted context omitted.

Know Your Customer, requiring exchanges to provide the necessary data, etc.

Many exchanges that are crypto only don't have any KYC

The owners will get some interesting housecalls at some point, I'm sure
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