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

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

#61

Post by 1053r »

withdavidli wrote: post #53

While it was deemed to be treated as property, IRS never gave guidance on ability to treat it as like kind transaction. Accountants have been asking for this clarification for years. SEC treating ICO as a security. IRS needs to come out with more guidance, but doing taxes is going to be a pain with crypto to crypto. Not looking for trouble with IRS, especially when gains were plentiful for so many this year. Pay your…

What? The IRS gave guidance for this in 2014! It's right there under item Q-6 in Notice 2014-21. https://www.irs.gov/pub/irs-drop/n-14-21.pdf

"Q-6: Does a taxpayer have gain or loss upon an exchange of virtual currency for other property?"

"A-6: Yes." (quote continues, but there you go).

I have no idea how folks came to the conclusion that 1031 swaps were ever acceptable, but it's always been clear that the IRS did not think they were.

TL;DR Don't get your tax advice from Reddit. (Or random commenters on hacker news, for that matter.)

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

#62

Post by nerdwaller »

chollida1 wrote: post #3

Probably good news for investors long term. Bitcoin again continues to grow up and be treated as an equal to bonds, stocks, etc. If you are a holder, or HODL as the kids say, then you get the benefit of long term rates, if you are a short term trader then you pay the short term capital gains rates, just like any other currency/commodity. trade. Concrete rules will bring in more conservative money. This was the last l…

It’s a double edge sword I guess, because if these are treated as securities - many exchanges will need to subscribe to a lot more regulation and start providing tax paperwork (1099s included) - requiring them to have an SSN on file, removing loads of the anonymity people may be fond of.

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

#63

Post by tonfa »

jMyles wrote: post #50
tonfa wrote: post #26

Earlier quoted context omitted.

The trend is towards KYC compliance and automatic sharing with tax authorities. I assume after a while very few countries will tolerate exchanges not complying.

...and what exactly will they do about it? The question is about decentralized exchanges. Countries may choose not to "tolerate" whatever they wish, but the internet is under no compulsion to tolerate shortsighted countries.

They can prosecute the operators of those sites, not like it didn't happen in the internet before. Usually some things survive, but at the cost of extra hurdles (e.g. only accessible via tor, but even there, some people got busted through bad opsec).

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

#64

Post by shawabawa3 »

nawtacawp wrote: post #43
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 purchased $300 BTC the other day on CB and they wanted a $30 transaction fee to withdraw the BTC off their site. I wonder if this fee can also be considered part of the purchase?

Just FYI, coinbase is paired with GDAX, their exchange.

You can transfer your bitcoin to GDAX and withdraw it from there for free (they will eat the bitcoin fees)

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

#65

Post by krrrh »

peter303 wrote: post #57
antihero wrote: post #7

How would they enforce this in any way at all?

If they audit all your real cash accounts and see undeclared inflows. Only about 1 in 200 individual taxpayers recieve comprehesive audits these days.

If newspaper headlines start talking about how many crypto-holders are engaging in tax evasion, you can guess where those limited resources will be targeted.

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

#66

Post by sharemywin »

tyleraldrich wrote: post #56
sharemywin wrote: post #2

So, this and the SECs recent decisions are the point when the US gets left behind on the next major advancement of technology. An almost fricitionless, ubiquitous, audit-able marketplace. well, except for monero and zcash.

Did you really think you'd be able to trade around money without being taxed?

So, what do I pay in? Does that mean every transaction in monopoly should be taxed? How about coins ERC20 tokens inside ethereum? what if I trade one crypto kittie for another?

I get that buying something for USD and later selling something for USD you've made a gain.

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

#68

Post by jMyles »

tonfa wrote: post #63
jMyles wrote: post #50

Earlier quoted context omitted.

...and what exactly will they do about it? The question is about decentralized exchanges. Countries may choose not to "tolerate" whatever they wish, but the internet is under no compulsion to tolerate shortsighted countries.

They can prosecute the operators of those sites, not like it didn't happen in the internet before. Usually some things survive, but at the cost of extra hurdles (e.g. only accessible via tor, but even there, some people got busted through bad opsec).

You mean the operators of web front-ends which provide access to the exchange? I suppose that's possible. But I don't know how long that will even be the main way that people access them.
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