Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

IRS reminds taxpayers to report virtual currency transactions

irs.gov

Post reply on HN
Print view View original

271–278 of 278 posts

Re: IRS reminds taxpayers to report virtual currency transactions

#271

Post by isostatic »

Spooky23 wrote: post #71
cft wrote: post #28

Earlier quoted context omitted.

What if I bought 1BTC at $10, then I bought 1BTC at $200, then I bought something with 1BTC when BTC dropped to $100/1BTC? Which BTC was used for the purchase- the one I bought at $10 or the one at $200? It sort of kills the use of cryptocurrency as "currency" in the US. Imagine if in the end of the year we had to report every dollar transaction (e.g. buying a coffee and a bagel), trace how you earned that dollar and…

This is precisely the same situation that you would have using other currencies.

In the U.S. if you were to spend $100 on euros in January, buying say €80, then spend another $100 in March, buying €70, then you sell €75 in June for $130, you presumably have to show that on your tax form?

Re: IRS reminds taxpayers to report virtual currency transactions

#272

Post by [deleted] »

rspeer wrote: post #224
saosebastiao wrote: post #149

Earlier quoted context omitted.

> You can get the transaction date via the block chain or your exchanges reporting and then lookup the USD value at the time. What if the exchange I traded on doesn't have a USD Fiat pairing? Can I use any price from any exchange that day? Can I report $0.06/BTC for an xrp sale on 4/16, the date of the major coinbase flash crash? Does it have to be the exact price at the exact time? Can I choose the USD value of the…

It kind of sounds like you're trying to think of tax law as some sort of CTF programming game where you're supposed to find the exploit. That's definitely not what tax law is. You should report your taxes as honestly as possible, using reasonable prices for things.

[deleted]

Re: IRS reminds taxpayers to report virtual currency transactions

#273

Post by sgroppino »

purple-again wrote: post #4

If you are walking down the beach and find a $20 bill on the ground, you are required to report it as income. The only way that I know of that you can legally enrich yourself without paying taxes is via a direct gift and that’s because the giver pays tax instead of you.

Even if it's the $20 bill you lost the day before?

Re: IRS reminds taxpayers to report virtual currency transactions

#274

Post by loeg »

jmalicki wrote: post #243
loeg wrote: post #130

Earlier quoted context omitted.

There is a 0% capital gains tax bracket, for example. Additionally, below a certain (low) level of wage income deductions and credits can negate nominal income tax owed, for an effective zero or even negative (with credits) tax rate.

Yes, but there are still reporting requirements, and you have to report and pay what may be owed.

The comment under reply was talking about payment requirements, not filing requirements:

> The only way that I know of that you can legally enrich yourself without paying taxes…

Re: IRS reminds taxpayers to report virtual currency transactions

#275

Post by parliament32 »

sgroppino wrote: post #273
purple-again wrote: post #4

If you are walking down the beach and find a $20 bill on the ground, you are required to report it as income. The only way that I know of that you can legally enrich yourself without paying taxes is via a direct gift and that’s because the giver pays tax instead of you.

Even if it's the $20 bill you lost the day before?

In the crypto context, you add a $20 loss and a $20 cap gain, which nets 0 and equals 0 tax.

Re: IRS reminds taxpayers to report virtual currency transactions

#276

Post by tibbon »

spookthesunset wrote: post #134
tibbon wrote: post #123

Earlier quoted context omitted.

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...

Or have high speed trading bots constantly selling alt currencies against each other.

Re: IRS reminds taxpayers to report virtual currency transactions

#277

Post by paythetax »

saosebastiao wrote: post #212
s73v3r_ wrote: post #185

Earlier quoted context omitted.

The fact that these things are extremely volatile is not the IRS's problem. You are the one responsible for recording the details of your trade.

I did record the details of my trade. What I didn't record was the concurrent status and details of some completely unrelated market on a completely unrelated exchange that establishes some sort of mythical fair market value denominated in USD that so far has no canonical way of being calculated anyway. Nobody can answer the question in any precise way, the IRS guidance on the issue is barebones and not informative a…

The IRS appreciates when you try. It sounds like you’re deliberately trying to fuck them and make excuses. I know crypto is young and naïve, not unlike those who deal in it, but if it’s one organization you don’t mess with, it’s the IRS. Unless you’re wealthy enough to hold dual citizenship and/or buy off some senators, you WILL lose.

Alternatively, if you can’t handle the tax reporting, hire an accountant, or don’t day trade cryptocurrencies. The IRS won’t give two shits about your smug “what about”s when they garnish your wages for eternity.

Re: IRS reminds taxpayers to report virtual currency transactions

#278

Post by toast0 »

sokoloff wrote: post #267
toast0 wrote: post #239

Earlier quoted context omitted.

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.

There is a general doctrine of substance over form. If the substance of the transaction is that "coin A became renamed to coin B with no other changes", that is likely to eventually be judged by the tax court to be a non-taxable event. An individual tax filer can take a position that has a reasonable justification without penalty. You're citing existing precedents/case law that has been decided. The cryptocurrency ca…

I don't think the general doctrine applies in this case, given that the law is written to require specific form for no apparent reason, and there is precedent that otherwise meeting the requirement but not following the prescribed form does not result in the desired outcome.

I would put more weight on the possibility of considering it a 1031 like-kind exchange, than a tax free merger/reorganization . Although I don't have a lot of exposure to the 1031 rules to know if there's a clear objection there.

Post reply on HN