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U.S. Treasury calls for stricter cryptocurrency compliance with IRS

cnbc.com

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Re: U.S. Treasury calls for stricter cryptocurrency compliance with IRS

#11

Post by brightball »

mdorazio wrote: post #10

As someone with a decent amount of money in crypto, I welcome this. I want to pay taxes on crypto capital gains in a way that makes sense instead of trying to guess my way through it, and I also want clear rules for exchanges, pools, etc. to follow to make reporting easy at tax time.

Yea, what I don't understand is how something like using ETH to buy another coin should be taxed? I totally get converting it back to dollars and calling that capital gains but trying to tax conversions from one to another seems nutty to me.

Re: U.S. Treasury calls for stricter cryptocurrency compliance with IRS

#12

Post by nightski »

brightball wrote: post #11
mdorazio wrote: post #10

As someone with a decent amount of money in crypto, I welcome this. I want to pay taxes on crypto capital gains in a way that makes sense instead of trying to guess my way through it, and I also want clear rules for exchanges, pools, etc. to follow to make reporting easy at tax time.

Yea, what I don't understand is how something like using ETH to buy another coin should be taxed? I totally get converting it back to dollars and calling that capital gains but trying to tax conversions from one to another seems nutty to me.

I feel like it would get really complicated to determine cost basis and actual capital gains if you did not do this. But maybe it's easy and I am missing something.

Re: U.S. Treasury calls for stricter cryptocurrency compliance with IRS

#14

Post by garmaine »

brightball wrote: post #11
mdorazio wrote: post #10

As someone with a decent amount of money in crypto, I welcome this. I want to pay taxes on crypto capital gains in a way that makes sense instead of trying to guess my way through it, and I also want clear rules for exchanges, pools, etc. to follow to make reporting easy at tax time.

Yea, what I don't understand is how something like using ETH to buy another coin should be taxed? I totally get converting it back to dollars and calling that capital gains but trying to tax conversions from one to another seems nutty to me.

Why? If you trade Apple stock for Tesla, it’s a taxable event. There isn’t any requirement that USD be involved.

Re: U.S. Treasury calls for stricter cryptocurrency compliance with IRS

#15

Post by mancerayder »

brightball wrote: post #11
mdorazio wrote: post #10

As someone with a decent amount of money in crypto, I welcome this. I want to pay taxes on crypto capital gains in a way that makes sense instead of trying to guess my way through it, and I also want clear rules for exchanges, pools, etc. to follow to make reporting easy at tax time.

Yea, what I don't understand is how something like using ETH to buy another coin should be taxed? I totally get converting it back to dollars and calling that capital gains but trying to tax conversions from one to another seems nutty to me.

The bigger problem is that the automation behind sufficient tracking to make it easier to report is missing - or was. I bought stuff from Bittrex years ago, and I was forced to buy BTC to convert it to buy something else, Bittrex went away (and never cared anyway), so now I have some headaches to report. I'm glad my holdings were small.

All this goes away if there's automation and agreement among the exchanges. Of course, for those with wallets, I'm not sure what the solution there is. I'm guessing there should be some software one can use to track transfer times + prices and aggregate that, based on address... or something.

Re: U.S. Treasury calls for stricter cryptocurrency compliance with IRS

#16

Post by dclaw »

garmaine wrote: post #14
brightball wrote: post #11

Earlier quoted context omitted.

Yea, what I don't understand is how something like using ETH to buy another coin should be taxed? I totally get converting it back to dollars and calling that capital gains but trying to tax conversions from one to another seems nutty to me.

Why? If you trade Apple stock for Tesla, it’s a taxable event. There isn’t any requirement that USD be involved.

You do not trade 1 stock for another, you have to sell it, wait t+2 days for it to clear, then use those proceeds to buy the other stock. It's not the same in any manner.

Re: U.S. Treasury calls for stricter cryptocurrency compliance with IRS

#17

Post by sandworm101 »

I'm all for reporting cryptocurrency as income. Bring on the tax deductions. Now my graphics card is an expense. So too the rest of my gaming rig, a rig that spends more time mining coin than it does playing games. My power bill? What accelerated depreciation can I take on a graphics card? Did I even turn a profit this year?

A few decades ago the IRS looked into rewards schemes, air miles and grocery store loyalty points. Those are technically income that must be declared. The result of the IRS investigation was that the entire are is too difficult to assess, too riddled with negative valuations that could be declared as losses (ie points that expire). I think they will come to the same conclusions for small bitcoin miners.

Re: U.S. Treasury calls for stricter cryptocurrency compliance with IRS

#19

Post by Pulcinella »

sandworm101 wrote: post #17

I'm all for reporting cryptocurrency as income. Bring on the tax deductions. Now my graphics card is an expense. So too the rest of my gaming rig, a rig that spends more time mining coin than it does playing games. My power bill? What accelerated depreciation can I take on a graphics card? Did I even turn a profit this year? A few decades ago the IRS looked into rewards schemes, air miles and grocery store loyalty po…

You could already do that, but generally the standard deduction is better for most people than whatever they get by itemizing.

Re: U.S. Treasury calls for stricter cryptocurrency compliance with IRS

#20

Post by sandworm101 »

Pulcinella wrote: post #19
sandworm101 wrote: post #17

I'm all for reporting cryptocurrency as income. Bring on the tax deductions. Now my graphics card is an expense. So too the rest of my gaming rig, a rig that spends more time mining coin than it does playing games. My power bill? What accelerated depreciation can I take on a graphics card? Did I even turn a profit this year? A few decades ago the IRS looked into rewards schemes, air miles and grocery store loyalty po…

You could already do that, but generally the standard deduction is better for most people than whatever they get by itemizing.

Graphics cards are selling for thousands of dollars. Small dedicated mining rigs cost upwards of 10k. It doesn't take many of those to get beyond standard deductions.
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