261–270 of 278 posts
What I'm getting out of it all is, people who did not make money on cryptocurrencies this past year are getting some satisfaction from the difficulties of those that did.
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You can’t possibly buy bubblegum using stock. Having the properties of a currency makes them currencies!
I'll sell you all the bubblegum you can chew for some stock. I don't even care _what_ stock.
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I have two questions: 1) If one had used bitcoin as a currency (bought pizza, bubblegum, etc.), are these new "treatments" of cryptocurrency implying one has to report each of these purchases and the tax implication there in? 2) Lets say you are a miner and mine a bitcoin a month (I know not realistic but helps simplify question). Now, lets say you buy pizza with bitcoins from your wallet every month. What is the cos…
Not an accountant and not your accountant but as someone who ran a small business: If you run a small business which grosses $X,000 per month, you will a) find that that is not that rare and b) benefit from keeping appropriate records of your expenses, including electricity and depreciation of expensive equipment, such that you can claim them on the tax return for your business each year. You might choose to swap ass…
Apart from patio11's good advice I would add that it may be important (depending on your tax laws) to record the value of the asset (i.e. BTC or whatever) when you received it and the value when you sold it. The difference may be capital gains/losses and might be taxed differently. You also need to understand if the accounting is LIFO (the last BTC you received are sold first), FIFO (the first BTC you received are sold first) or cost averaged. Some countries require that you declare which system you are using before you do any transactions, so some caution is warranted. I don't know how the tax system works in your country so this is not advice. See paragraph 1 :-)
P.S. I've never bought nor sold crypto currencies, but my small consulting business is primarily overseas work, so I have to do a lot of FOREX.
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Not an accountant and not your accountant but as someone who ran a small business: If you run a small business which grosses $X,000 per month, you will a) find that that is not that rare and b) benefit from keeping appropriate records of your expenses, including electricity and depreciation of expensive equipment, such that you can claim them on the tax return for your business each year. You might choose to swap ass…
If you're making enough money to make it reasonable to pay the fees, I have found that a tax accountant has been incredibly helpful, even if you have things pretty much under control. If you have everything well documented, having someone look over it will not be very expensive and could save you a lot. Of course, YMMV. Apart from patio11's good advice I would add that it may be important (depending on your tax laws)…
Wish there was a dummies book on this. I do have an accountant btw but want to learn myself.
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He exhanged a storage of value from one party to another on a set date. There was an agreed upon value at the time (bitcoin to USD and then USD to altcoin). You can’t convert your real estate into stock without paying taxes anymore than you can one crypto coin to another.
Most people expect cryptocurrencies to behave like, well, currency. Isn’t it the case that with Forex trading you simply pay tax on total gains & losses, not every trade you made?
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If you're making enough money to make it reasonable to pay the fees, I have found that a tax accountant has been incredibly helpful, even if you have things pretty much under control. If you have everything well documented, having someone look over it will not be very expensive and could save you a lot. Of course, YMMV. Apart from patio11's good advice I would add that it may be important (depending on your tax laws)…
Thx for your comment. I must admit I just learned about FIFO/LIFO for stocks. Seems in the US, the regime is FIFO on stocks unless you declare otherwise .. but you have the option to change it (as I understood from a few hours of reading online). Forex is still mystifying me because one can also spend forex for goods. I assume you have expenses overseas too ... do you just average out the value of the forex account o…
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Not a tax pro, but I would treat any involuntary conversion similar to a corporate action where you got new shares for old shares, the new shares inherited the basis of the old shares, and would generally not be a taxable event. This is assuming it’s analogous to a tax-free spinoff event in the equities world.
You only get to treat a corporate action as a non-taxable event if the event meets certain requirements and follows certain forms. As cryptocoins aren't actually shares in a corporation, I don't think you're going to get a non-taxable conversion.
You're citing existing precedents/case law that has been decided. The cryptocurrency cases have not yet been adjudicated by the tax court, so as an individual filer, I would be comfortable taking any reasonably justifiable position and defending it in audit if needed.
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I'm not even talking about that - parent comment talks about requirements that are literally impossible to comply with, and I talk about laws that are put into place after a tax year ends and apply retroactively, and official documents that contradict one another and the inability to get an official explanation from the government prior to the filing deadline. How is any of that even remotely "losing track of my reco…
> in fact my own record keeping and fastidiousness led to the discovery of all 3 of those problems. Does that mean it might be safer to be less fastidious so that no-one can uncover records that never existed?
A tax CPA I used in the past advised me with (hundreds of) short term equity trades to just present the before and after figures, since that represented the true income. They explained that in their experience, that was satisfactory to the IRS. It is unrealistic to expect people making frequent trades to carefully document every trade (unless perhaps that is their profession). It's even worse for cryptocurrencies, si…
Isn't it the case that all bitcoin transactions are in some kind of . . . what do you call it . . . ledger? And don't we know roughly the price of bitcoin in USD at all times? It seems like it would be pretty easy to import all this info into a spreadsheet or even just a little Python script to calculate everything correctly according to wash rules and what have you.
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If I bought 1 ton of gravel at $10, then bought one ton of gravel at $200, then swapped one ton when it was $100 for a meal out. Which ton was used for the purchase, the one I bought at $10 or the one at $200?
I’m unclear if you were asking this tongue-in-cheek, or if you really were interested and simply used an arbitrary asset for your example, but in case it was the later, here’s my understanding: Do you account typically report FIFO or LIFO? You can register a capital loss of $100 if you account last-in-first-out, but will be on the hook when you sell your $10 gravel on the future at any price higher than $10. You’d re…