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

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

#81

Post by robot_no_419 »

chollida1 wrote: post #68
nonameiguess wrote: post #56

Earlier quoted context omitted.

This isn't actually true as companies routinely acquire each other using mostly or only stock. However, the IRS does not consider exchange of stock for stock in mergers and acquisitions to be a taxable event.

Different case than what we're talking about here. Your case would be the same if it was cash buying a company. Here we're talking about something different, which is an individual trading one form of crypto for another and showing how the same trade donew ith stock would be taxed similarly if you just swapped stock with another trader.

You are also taxed if you use cryptocurrency to directly buy goods or services as well. Based on my understanding, that would include using cryptocurrency to buy a company.

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

#82

Post by x3n0ph3n3 »

tluyben2 wrote: post #8
golover721 wrote: post #5

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.

This is what I feel; becoming more normal. Sure a lot of people don't want to report it; don't think those people will start now anyway.

I think we should all be incredulous that any of this is "normal."

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

#83

Post by xur17 »

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.

Is this actually going to help with that though? It sounds like this is just going to force exchanges and businesses to report transfers that are >= $10k to the federal government. In some ways this might make it worse since the federal government will have incomplete information and might audit you because they think you owe taxes when you really don't.

That said, I'd also really like to have clearer guidance around different crypto tax situations. Buying, selling, and transferring are all pretty darn clear to me. Wrapping tokens, staking tokens, merging multiple tokens into one, etc are all extremely unclear and result in inefficient technical solutions right now. It's horribly frustrating.

To give a simple example, I'd love to stake my ETH via a decentralized staking pool. To do so I have to convert my ETH into another token that is convertible back into ETH when I go to withdraw. In theory that might be a taxable event. In my mind it really shouldn't be since it's still ETH, just deposited somewhere.

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

#84

Post by xur17 »

qeternity wrote: post #45
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…

If you’re actually mining, you’re better off setting up a Sole Prop and filing.

Yup. If you're mining, and it fits the definition of a "business" instead of a hobby (google for more details - there are rules around what qualifies), you don't have to actually set anything up. You just file a schedule c as part of your taxes, and can therefore deduct expenses.

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

#85

Post by xur17 »

toss1 wrote: post #62
Pulcinella wrote: post #19

Earlier quoted context omitted.

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

GP could likely do it next week if he formed a business entity (Corp, LLC, etc.), which could properly take deductions from the first dollar of expense, as (s)he described. Form the company, fund it with initial capital, then spend on rigs, utilities, & currencies. Your costs are expense-able, profits are taxable, and it all goes on a Schedule C, K, or whatever, depending on your corp type. You can probably take loss…

You don't have to form a business entity. You can file as a sole proprietorship, which just means filling out a schedule c. There are some rules that you have to meet to qualify, but besides that it's just another form you fill out on your taxes.

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

#86

Post by uncomputation »

Barrin92 wrote: post #79
Daishiman wrote: post #47

Earlier quoted context omitted.

I keep hearing about all these amazing crypto products, yet outside of this very specific scene, where curiously only the VCs and devs involved wax poetic about it, you can never seem to find a real customer talking about their experience. 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…

>"I keep hearing about all these amazing crypto products, yet outside of this very specific scene, where curiously only the VCs and devs involved wax poetic about it, you can never seem to find a real customer talking about their experience." because there is none. A paper[1] described this as 'Veblenian Entrepreneurship'. Being 'in crypto' isn't actually about producing any tangible goods or services, but consuming…

> a way for people to LARP as technologists or entrepreneurs without actually producing anything of use to the general public at large.

as someone who likes Words and Terms for things, thank you. It has always rubbed me the wrong way that blockchain enthusiasts use code as a verb. This may sound strange but I find I only use “code“ as a verb for people who do not work in tech to describe what I do. Even introductory programming materials, if you look at them, always say “learn to code,” or “coding,” which I always feel amateur saying. If it’s someone I work with or who even just works in tech, it’s always more specific. Don’t know if this makes sense in the slightest but thanks regardless for the link.

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

#87

Post by uncomputation »

matheusmoreira wrote: post #74
AlchemistCamp wrote: post #27

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's completely reasonable to tax investment earnings. Why? Don't americans have access to tax-free investment accounts like Roth?

They are only tax free if you are older than 60 and wait a 5 year holding period to prevent this exact evasion.

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

#88

Post by dred_prte_rbrts »

drummer wrote: post #73

Ah yes, the government mafia wants a bigger cut. A reminder: taxation is theft and slavery. The Crypto movement was created by people who recognize that.

A response completely bereft of any logical argument about why taxation is "theft and slavery". Do you have any arguments that would support this assertion?

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

#89

Post by dred_prte_rbrts »

bingbong70 wrote: post #55
pessimizer wrote: post #34

Earlier quoted context omitted.

They won't give it up at all, because there's absolutely no reason for them to. The reason they have this power is because they wield force legitimately, not because fiat is special.

A private organization (central bank) having a monopoly on printing and lending money to your government is acting "legitimately"? Many that have studied this system would disagree.

Where did you get the assertion that a central bank is a private organization? What evidence do you have for that?

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

#90

Post by ostrophonics »

dred_prte_rbrts wrote: post #88
drummer wrote: post #73

Ah yes, the government mafia wants a bigger cut. A reminder: taxation is theft and slavery. The Crypto movement was created by people who recognize that.

A response completely bereft of any logical argument about why taxation is "theft and slavery". Do you have any arguments that would support this assertion?

it's a comment on a web forum, he doesn't have to reiterate the entire history of heterodox economics for you to be convinced its a defensible position. and anyway, it's quite besides the point since the economic argumentation is secondary to the observation that cypherpunks were an anti-taxation and anti-government - basically anarchist - subculture out of which crypto emerged.
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