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IRS sends warning letters to more than 10k cryptocurrency holders

wsj.com

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Re: IRS sends warning letters to more than 10k cryptocurrency holders

#171

Post by lawn »

lizknope wrote: post #43
hcurtiss wrote: post #13

I'm sure there's a lot to know about this topic, but it's odd to me that they'd treat a "currency" as an appreciating asset. If I'm given a dollar (or peso) as change, and if between the time I receive the dollar and the time I spend it the currency purchasing power increases, I do not pay taxes on that gain. I can just buy more stuff with that dollar (including other currencies). In this instance, where it's increas…

How practical is bitcoin as a currency for day to day use. I thought the transaction time was 10 to 30 minutes. I get frustrated at the checkout counter when my credit card takes longer than 10 seconds. 10 to 30 minutes seems a lot closer to how long it takes for a stock sale to go through on E-Trade so I can see why the IRS would classify it more like a stock than currency.

When you pay with a credit card the merchant only gets a payment notification, the money is transferred much later. You'll get a notification in seconds with Bitcoin as well.

Of course I have to mention that Bitcoin has unreliable and sometimes very high fees. This is a problem with Bitcoin specifically not with cryptocurrencies in general.

As a practical example I bought computer parts recently and I paid with Bitcoin Cash. When I was prompted to pay I scanned a QR code with my phone and I was done. It was even smoother than having to input my credit card numbers into the site. Of course the experience is the same if you pay in person, which I did at a restaurant when I visited Japan. Extremely easy.

Re: IRS sends warning letters to more than 10k cryptocurrency holders

#172

Post by sangnoir »

bdcravens wrote: post #120
wrong_variable wrote: post #92

Earlier quoted context omitted.

What prevents Coinbase to go offshore then ?

The fact that they have a ton of VC they're already beholden to that is here in the US, and who aren't interested in IRS scrutiny themselves.

Also, the fact that Coinbase is in the US legal jurisdiction gives its clients confidence they would be made whole if anything untoward were to happen.

Re: IRS sends warning letters to more than 10k cryptocurrency holders

#173

Post by lawn »

Scoundreller wrote: post #89

So how does BitCoin Cash distribution get handled in USA? Is it like a dividend? A stock split? A spin-off? What about all of these airdropped tokens? Are they dividends, with tax payable even if you didn’t “collect” them in some way? Or splits? Can you deduct the Day1 value of the new token from the capital gain on the first token? Or do you assume the cost of the new token was $0 and any sale is a total capital gai…

In Sweden the value of the coin in a fork (like Bitcoin Cash) should be zero.

Re: IRS sends warning letters to more than 10k cryptocurrency holders

#174

Post by a_bitcoin »

roywiggins wrote: post #119
a_bitcoin wrote: post #115

Sure, it makes sense to tax earnings from cryptocurrency trading. But aren't there bigger fish to fry, richer people more flagrantly evading taxes? Let's sort that out first, k

We've underfunded the IRS, and investigating the rich is really hard, because the rich can pay for armies of tax lawyers. You can't go after them without substantial resources, and anti-government extremists have teamed up with pro-business extremists to throttle the IRS' enforcement capabilities. https://www.propublica.org/article/how-the-irs-was-gutted

The alliance between individualists and corporatists is the most bizarre thing about the US to me.

Re: IRS sends warning letters to more than 10k cryptocurrency holders

#175

Post by rolltiide »

lizknope wrote: post #43
hcurtiss wrote: post #13

I'm sure there's a lot to know about this topic, but it's odd to me that they'd treat a "currency" as an appreciating asset. If I'm given a dollar (or peso) as change, and if between the time I receive the dollar and the time I spend it the currency purchasing power increases, I do not pay taxes on that gain. I can just buy more stuff with that dollar (including other currencies). In this instance, where it's increas…

How practical is bitcoin as a currency for day to day use. I thought the transaction time was 10 to 30 minutes. I get frustrated at the checkout counter when my credit card takes longer than 10 seconds. 10 to 30 minutes seems a lot closer to how long it takes for a stock sale to go through on E-Trade so I can see why the IRS would classify it more like a stock than currency.

> 10 to 30 minutes seems a lot closer to how long it takes for a stock sale to go through on E-Trade so I can see why the IRS would classify it more like a stock than currency.

weird analogy. stock sales take 3 business days to go through, and the proceeds take another 3 business days to be spendable in a different checking account at a different institution. the securities regulator is trying to get stock sales to get down to 2 and 1 business day.

brokers like e-trade hide most of this behind the scenes, and you can certainly "sell a stock" in a few seconds on etrade. So not sure why it takes you 10-30 minutes?

Re: IRS sends warning letters to more than 10k cryptocurrency holders

#176

Post by Jach »

navigatesol wrote: post #145
Jach wrote: post #121

Earlier quoted context omitted.

Ignoring the periods in the past with very high transaction fees and network congestion, for the most part it's been as practical as a card and often faster since I can just use my phone to scan a QR code and click a verify button. We can also ignore the lightning network in the calculation of practicality. Normally if I send you a payment you'll see the notification of a pending transaction with the amount on your s…

> for the most part it's been as practical as a card and often faster Have you ever used a card? If you think that opening your phone, scanning a QR and then hitting "verify" is faster than a tap or swipe of your credit card, I'm not sure what to tell you. Best case scenario, they're about the same. > I can call up my card company and claim a fraudulent charge after getting the goods And they'll investigate and deter…

I of course use a card frequently, though have yet to have the "pleasure" of dealing with a tap-to-pay card. I don't really want to. I'd say average case (not best case) is they're about the same, but yes, getting out my phone and unlocking it, opening the bitcoin app, scanning the QR code and hitting confirm, then putting my phone away, is indeed often faster than getting out my wallet, picking out my card from the other crap in there, inserting it into the chip reader (or swiping it), and hitting confirm (after maybe having to enter a pin or zip code or tell it "this is a credit card" or dismiss a "do you want to donate to grocery store's cause-of-the-month?" dialog) and then sometimes having to sign a printout or a touch screen, then putting my card back into the wallet and putting my wallet away. CCs are a usability nightmare that I'm amazed we put up with.

> And they'll investigate

Have you never reported fraudulent charges before? There's basically no investigation unless it was an ACH thing.

Re: IRS sends warning letters to more than 10k cryptocurrency holders

#178

Post by aianus »

navigatesol wrote: post #145
Jach wrote: post #121

Earlier quoted context omitted.

Ignoring the periods in the past with very high transaction fees and network congestion, for the most part it's been as practical as a card and often faster since I can just use my phone to scan a QR code and click a verify button. We can also ignore the lightning network in the calculation of practicality. Normally if I send you a payment you'll see the notification of a pending transaction with the amount on your s…

> for the most part it's been as practical as a card and often faster Have you ever used a card? If you think that opening your phone, scanning a QR and then hitting "verify" is faster than a tap or swipe of your credit card, I'm not sure what to tell you. Best case scenario, they're about the same. > I can call up my card company and claim a fraudulent charge after getting the goods And they'll investigate and deter…

> And they'll investigate and determine you committed fraud, and you'll be fined or go to prison.

Trust me, nothing happens to these people. From first-hand experience I know that the merchant eats the cost 99% of the time when it's a card-not-present transaction.

Re: IRS sends warning letters to more than 10k cryptocurrency holders

#179

Post by trixie_ »

There are a bunch of websites that will help compile your crypto trades into the forms you need for your taxes. This year I used cointracker.io and it worked pretty good for me. It created a file that was easily imported into TurboTax. Also if you lost money on crypto you can claim some of that as a deduction.

Re: IRS sends warning letters to more than 10k cryptocurrency holders

#180

Post by roywiggins »

a_bitcoin wrote: post #174
roywiggins wrote: post #119

Earlier quoted context omitted.

We've underfunded the IRS, and investigating the rich is really hard, because the rich can pay for armies of tax lawyers. You can't go after them without substantial resources, and anti-government extremists have teamed up with pro-business extremists to throttle the IRS' enforcement capabilities. https://www.propublica.org/article/how-the-irs-was-gutted

The alliance between individualists and corporatists is the most bizarre thing about the US to me.

The corporations have the money and the "individualists" have the rhetoric that can persuade voters. It's a match made in hell.
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