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IRS reminds taxpayers to report virtual currency transactions

irs.gov

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Re: IRS reminds taxpayers to report virtual currency transactions

#131

Post by whorleater »

tibbon wrote: post #123
kchoudhu wrote: post #112

Earlier quoted context omitted.

Why is it unreasonable? Your brokerage should be tracking your entry and exit for each trade and sending you a comprehensive 1099-B come tax time. If your cryptocurrency brokerage isn't doing that for you, move your money elsewhere. If you can't find a brokerage that does that for you, maybe you should start wondering what other important controls are missing from your brokerage. Just saying.

What brokerage? I don't need any brokerage to trade one crypto for another. Find someone who wants X, I send them X and they send me Y in return. X and Y may not be fiat currencies, and the value in USD at the time may be spread by 10% on various markets at the moment. Does the IRS want me to value those transactions as per GDAX at that moment, or Upbit? Crypto takes out the need for middlemen like brokers. You can u…

Yes, so when you choose to not use a brokerage you're responsible for keeping track of your own transactions.

Re: IRS reminds taxpayers to report virtual currency transactions

#133

Post by charlesdm »

wbl wrote: post #118
charlesdm wrote: post #114

Earlier quoted context omitted.

He's talking crypto, not stocks. A brokerage company operating outside of the US has zero reason to supply you with any specific US tax docs.

Customer service is a selling point.

Sure. But America is not the world

Re: IRS reminds taxpayers to report virtual currency transactions

#134

Post by spookthesunset »

tibbon wrote: post #123
kchoudhu wrote: post #112

Earlier quoted context omitted.

Why is it unreasonable? Your brokerage should be tracking your entry and exit for each trade and sending you a comprehensive 1099-B come tax time. If your cryptocurrency brokerage isn't doing that for you, move your money elsewhere. If you can't find a brokerage that does that for you, maybe you should start wondering what other important controls are missing from your brokerage. Just saying.

What brokerage? I don't need any brokerage to trade one crypto for another. Find someone who wants X, I send them X and they send me Y in return. X and Y may not be fiat currencies, and the value in USD at the time may be spread by 10% on various markets at the moment. Does the IRS want me to value those transactions as per GDAX at that moment, or Upbit? Crypto takes out the need for middlemen like brokers. You can u…

> Even with them, unless you're trading for USD at the time it's a standing question of what the USD value was at the moment. This isn't like, "use the price in the WSJ that morning".

If you don't know the USD value of what you are trading then you are a pretty poor trader...

Re: IRS reminds taxpayers to report virtual currency transactions

#135

Post by loeg »

ghfbjdhhv wrote: post #39
gxs wrote: post #33

Earlier quoted context omitted.

Worth mentioning that there exists a $5MM lifetime max that any individual can gift before paying taxes. A common misconception is that you have to pay tax on every gift you make, but as long as you’re under that $5MM all you have to do is report it.

And if your gifts are less than $15,000 per year, you don’t even have to report it. So the vast majority of gifts are not supposed to be taxed or reported.

Note that it is $15k ($14k last I checked, but it may have risen) per gifter-giftee pair.

So I can give my son $14k, my wife can give my son $14k, and we can both given my daughter a combined $28k all without even registering against the $5 million lifetime exclusion or paying any gift taxes. And couples can do that every single year for decades, which adds up to millions even without touching the exclusion.

Re: IRS reminds taxpayers to report virtual currency transactions

#136

Post by sokoloff »

Berobero wrote: post #80
ghfbjdhhv wrote: post #39

Earlier quoted context omitted.

And if your gifts are less than $15,000 per year, you don’t even have to report it. So the vast majority of gifts are not supposed to be taxed or reported.

> $15,000 per year Importantly, per person receiving. In principle you have a virtually infinite tax-free gift giving exception available if you distribute your assets to enough people.

Per person receiving and person giving pair. So, a married couple can give their child $30K/yr and could give the child’s significant other another $30K/yr.

Re: IRS reminds taxpayers to report virtual currency transactions

#137

Post by spookthesunset »

charlesdm wrote: post #114
kchoudhu wrote: post #112

Earlier quoted context omitted.

Why is it unreasonable? Your brokerage should be tracking your entry and exit for each trade and sending you a comprehensive 1099-B come tax time. If your cryptocurrency brokerage isn't doing that for you, move your money elsewhere. If you can't find a brokerage that does that for you, maybe you should start wondering what other important controls are missing from your brokerage. Just saying.

He's talking crypto, not stocks. A brokerage company operating outside of the US has zero reason to supply you with any specific US tax docs.

> A brokerage company operating outside of the US has zero reason to supply you with any specific US tax docs.

So then don't use those brokerages if you are a USD customer?

Re: IRS reminds taxpayers to report virtual currency transactions

#138

Post by markonthewall »

whataretensors wrote: post #76
DoreenMichele wrote: post #61

Earlier quoted context omitted.

My recollection is all you said was "The IRS needs to come up with some sane rules surrounding this issue." There was nothing wrong with saying it, never mind the spin of replies to it. I am stating that because removing the comment combined with your follow up comment looks weird and suspicious in a way the first comment did not to me. I would hate to see you subjected to the Streisand Effect here in a way that coul…

Thanks. To be clear I intend to pay my taxes fully. I also fully expect to have 6 month long mail-only communication with 2-4 weeks between insane letters, as is standard when dealing with the IRS as a small business owner.

Good man.

Re: IRS reminds taxpayers to report virtual currency transactions

#139

Post by loeg »

swyx wrote: post #59
my_username_is_ wrote: post #3

They still haven't issued guidance on how to treat forks like BTC/BCH, have they?

this is the frustrating thing to me. IRS shouldnt be allowed to stay ambiguous on basic accounting issues (listen to https://letstalkbitcoin.com/blog/post/the-bitcoin-game-53-ad... ) if they also want to tax it. particularly if the tax year has already passed, how does it make sense for the IRS to retroactively define tax guidance. if you dont bother to define the rules of the game then you're just pretty much barefa…

There's nothing retroactive about this. Just a gentle reminder of the rules that already exist.
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