41–50 of 115 posts
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the common analogy would be an FX pair (like GBPUSD)
And how are forex transactions taxed? Why don't we just apply that policy to crypto?
This is the core of the whole issue; IRS (and similar bodies) are deciding what crypto "is", at least for tax purposes (as is their purview). That has implication for how and when things are taxed.
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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.
Earlier quoted context omitted.
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.
Ahh man, you are indeed right. But I seriously haven't seen a paper stock certificate in person this century.
IMO: the IRS really needs to re-think the way crypto currency gets reported, the way it's actually used is more or less incompatible with the 8949 form and popular exchanges (coinbase in particular) generate reports that can't be directly converted to it.
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…
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.
It's completely reasonable to tax investment earnings. That said, these regulations are concerning to me as a developer interested in actually building on blockchain technology. 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 s…
You either acknowledge that cryptocurrencies look close enough to currencies or securities and regulate them as such, or you promote them for illegal and ambiguously legal reasons for which there is little rationale for a commercial endeavor.
Anything else is just basically letting people slowly reinvent the finance system, with all the inevitable pitfalls it will have. Yes, it's regulated, so are most industries that have substantial systemic risks. The web was an anomaly, but as its proponents and participants acquired more power in society, society sought to regulate the rougher edges (for better or worse).
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.
If I buy 1000 of USD with 1000 CAD, with the expectation CAD will fall, then since my taxes are due in CAD in my case, when I sell those USD for 1500 CAD I've realized a gain of 500 CAD that would be considered taxable income. But if CAD goes up and I have to sell those USD for only 500 CAD, then I've realized a loss of 500 CAD and I could deduct it on my taxes.
Seems reasonable enough to tax currencies like investments when they're used as investments. Any asset held in that manner usually would be taxed like that.
IMO: the IRS really needs to re-think the way crypto currency gets reported, the way it's actually used is more or less incompatible with the 8949 form and popular exchanges (coinbase in particular) generate reports that can't be directly converted to it.
I use koinly.io and it does a nice job of preparing the 8949 for me, and syncs with my various wallets and exchanges. Plugs right into TurboTax.
I used Cointracker for generating tax forms from Coinbase to plug into TurboTax for the past 2 years, but Koinly website looks really nice and clean, and it feels less bloated than Cointracker, so I will give it a try next year. Especially since Cointracker started ramping up their pricing.
It's completely reasonable to tax investment earnings. That said, these regulations are concerning to me as a developer interested in actually building on blockchain technology. 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 s…
It seems to me that the US government is doing this at the right time. We're not in the early stages of cryptocurrency. We've had 10 years for lots of new ideas to mature, and we're on the verge of the most promising of all - Etherium transitioning from PoW to PoS. I'd say this is somewhat late given the Bitcoin/Etherium's popularity among small investors with much to lose, immense greenhouse gas emissions, and facil…
And just like fiat, these activities will continue in the shadows, while innovation is harmed by regulation.