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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…
This seems like a positive for the legitimization of cryptocurrency. Of course if you were trying to use it to avoid paying taxes you may feel otherwise. Hopefully it leads better forms and adoption by exchanges to provide useful tax documents.
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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.
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 know this because we did such a trade with another fund.
Swapping one crypto for another is the same thing, the fact that fiat isn't involved doesn't change much in this scenario.
Earlier quoted context omitted.
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.
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.
If I were to swap some Apple shares for Microsoft shares , without selling one for cash first, that would still be a taxable event. I know this because we did such a trade with another fund. Swapping one crypto for another is the same thing, the fact that fiat isn't involved doesn't change much in this scenario.
At least from what I understand, just doing what's rapidly becoming run of the mill Web3 development is becoming extremely fraught territory for US citizens who want to comply with accounting and tax rules. It's an even bigger deterrent for students with limited ability to hire an accountant.
It wouldn't have been good for the US to stifle the web 25 years ago and I don't think regulating blockchain tech worldwide will work any better than trying to restrict the export of PGP did. Talent will just leave.
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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.
If I have a stock certificate for AAPL, and you have a TSLA stock certificate (I’m talking about actual paper certificates), we can trade them and it is a taxable event.
Earlier quoted context omitted.
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.
That is just a side effect about how certain exchanges work, you can still trade one good for another without using cash, and it's a taxable event because your 'liquidating' property. It's known as bartering income: https://www.irs.gov/taxtopics/tc420
Earlier quoted context omitted.
If I were to swap some Apple shares for Microsoft shares , without selling one for cash first, that would still be a taxable event. I know this because we did such a trade with another fund. Swapping one crypto for another is the same thing, the fact that fiat isn't involved doesn't change much in this scenario.
No one offers swapping x shares for y shares, you have to sell and buy. You can swap currency and some people believe crypto is currency, so it is different.