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48-nation bloc to crack down on using crypto assets to avoid tax

theregister.com

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Re: 48-nation bloc to crack down on using crypto assets to avoid tax

#101

Post by rchaud »

noodlesUK wrote: post #12

I’m not a crypto person, but I have always been curious - how does the tax situation actually work if you don’t want to commit tax evasion? I know that on US tax returns you need to tick a box if you’ve transacted in crypto, and you have to pay tax on the realized gains/losses. How do you actually go about doing that accounting practically given the volatility and the number of transactions? Are there special pieces…

Doesn't the exchange provide a list of transactions and P&L? You could just submit those numbers.

Re: 48-nation bloc to crack down on using crypto assets to avoid tax

#102

Post by rchaud »

_pc3z wrote: post #87

I'd like to see them try to crack down on Monero.

May as well try to goad virus makers to target MacOS. They probably could but it wouldn't be worth the hassle as so few computers would be affected, relative to the global desktop market.

Re: 48-nation bloc to crack down on using crypto assets to avoid tax

#103

Post by zby »

latchkey wrote: post #74
zby wrote: post #37

Earlier quoted context omitted.

I wrote my own program to parse the logs I get from exchanges and compute the taxes.

And if there is a "bug" in your software that accidentally under calculates how much taxes you owe, no big deal, right? My point being, this is why it is better to hand these sorts of things off to a third party for auditing. Otherwise, you might end up in a nice pickle with the IRS after having checked that box saying you were trading crypto.

I tried - but they wanted me to give them the data in Excel. Once I did the parsing, summing it up was trivial (and it would not fit in Excel anyway).

That was quite a few years ago.

Re: 48-nation bloc to crack down on using crypto assets to avoid tax

#104

Post by robocat »

Geee wrote: post #54
roenxi wrote: post #2

> ... and a lousy store of value I expect this to be true eventually, but so far Bitcoin has been doing OK as a store of value. Unless people bought in the relatively short peaks, HODLers aren't losing crazy amount of money and one could reasonably anticipate that it'll reach $60k/bitcoin again in the near future. There seem to be people convinced that the crypto types are coming out a long way behind but I'm not rea…

People confuse a lot of things about volatility, risk, and long term valuation. Bitcoin is an inherently good long term store of value, because it has deterministic and finite inflation schedule, which is also plausibly immutable (contrary to fiat cryptocurrencies, called "cryptos"). On the other hand, fiat currencies are a lousy store of value, because they have non-deterministic, but always positive inflation sched…

> Bitcoin is an inherently good long term store of value

That really depends on the taxation rules in your jurisdiction.

Re: 48-nation bloc to crack down on using crypto assets to avoid tax

#105

Post by Geee »

theorytheory22 wrote: post #98
Geee wrote: post #54

Earlier quoted context omitted.

People confuse a lot of things about volatility, risk, and long term valuation. Bitcoin is an inherently good long term store of value, because it has deterministic and finite inflation schedule, which is also plausibly immutable (contrary to fiat cryptocurrencies, called "cryptos"). On the other hand, fiat currencies are a lousy store of value, because they have non-deterministic, but always positive inflation sched…

You're missing the forest through the trees. Bitcoin doesn't have value beyond what can be converted into real currency. Real currency is used to buy things. BTC isn't. The currency-BTC market IS the entire value of Bitcoin. None of the other stuff matters, because BTC is solely denominated in actual currencies. BTC is non-inflationary? Doesn't matter. You only use it to buy USD or actual currencies. If there's less…

> But try and point out somebody it's helped?

There are a few stories of how Bitcoin helps people in Africa in this short documentary: https://www.youtube.com/watch?v=r7lm7IHnKDw

Re: 48-nation bloc to crack down on using crypto assets to avoid tax

#106

Post by cheschire »

theorytheory22 wrote: post #98
Geee wrote: post #54

Earlier quoted context omitted.

People confuse a lot of things about volatility, risk, and long term valuation. Bitcoin is an inherently good long term store of value, because it has deterministic and finite inflation schedule, which is also plausibly immutable (contrary to fiat cryptocurrencies, called "cryptos"). On the other hand, fiat currencies are a lousy store of value, because they have non-deterministic, but always positive inflation sched…

You're missing the forest through the trees. Bitcoin doesn't have value beyond what can be converted into real currency. Real currency is used to buy things. BTC isn't. The currency-BTC market IS the entire value of Bitcoin. None of the other stuff matters, because BTC is solely denominated in actual currencies. BTC is non-inflationary? Doesn't matter. You only use it to buy USD or actual currencies. If there's less…

I think you're trying to articulate the difference between price and intrinsic value?

Re: 48-nation bloc to crack down on using crypto assets to avoid tax

#107

Post by PeterisP »

siftrics wrote: post #67
PeterisP wrote: post #49

Earlier quoted context omitted.

How is that different? The transaction data export from most crypto-exchanges takes up the same amount of clicks no matter if you have 5 or 5000 transactions, as do the adding of whatever formulas you might need in excel to manage your business - which is obviously the case if your trading volume is substantial; if you were doing a substantial trading volume in, say, collectible card game cards, you'd also have to ha…

You can do extremely complicated things on chain that require manual human analysis to figure out how to report it. You can do this thousands of times per year. It adds up to a huge amount of work.

Part of the transaction costs for your trading business is properly accounting for these transactions; if that is a huge amount of work and makes the transactions unprofitable, well, don't do them.

If you do complex transactions thousands of times per year, it would be reasonable to expect (and in many places be a legal duty) to figure out how you'll be accounting for these transactions in your books before the first transaction is made, and keep up to date bookkeeping for these operations continuously - not just making some reporting long after the fact. Like, such activities are so clearly above the level where either you hire a certified accountant or become a skilled accountant yourself, that's table stakes for doing such things. You're effectively running a business, so you're required to act like one, you're not permitted (generally, depends on jurisdiction) to just wing it.

Re: 48-nation bloc to crack down on using crypto assets to avoid tax

#108

Post by e12e »

adolph wrote: post #82
e12e wrote: post #13

Earlier quoted context omitted.

Get paid in crypto, don't tell the government? Don't collect/pay VAT nor tax on profits? Ed: or as a contractor/consultant - don't pay social security nor income tax?

I don't see how "cypto asset" are different from any other kind of payment. For example, if you are an employer and you pay in crypto, do your reporting requirements suddenly evaporate simply because the method is not a check?

No, it's illegal - it's just less visible (wage theft/tax evasion is also easier with cash only businesses). Transactions don't go through regulated banks, with reporting requirements, for example.

Re: 48-nation bloc to crack down on using crypto assets to avoid tax

#109

Post by I_Am_Nous »

koolba wrote: post #22
noodlesUK wrote: post #12

I’m not a crypto person, but I have always been curious - how does the tax situation actually work if you don’t want to commit tax evasion? I know that on US tax returns you need to tick a box if you’ve transacted in crypto, and you have to pay tax on the realized gains/losses. How do you actually go about doing that accounting practically given the volatility and the number of transactions? Are there special pieces…

> I know the real cynical answer is that most people just don’t report correctly, but I’m curious how you’d do it if you wanted to be legit. If you want to follow the letter of the law, you need to consider each and every transaction in calculating your cost basis, converting to USD at each step. The latter is particularly problematic as it’s possible to transact in something that does not have a clear USD price. So…

>If each and every transaction is not recorded at the time of execution, good luck trying to get that detail back again.

I did some crypto trading on an exchange, and while it was able to give me the amounts I traded, it didn't tell me the price of those coins at the time of the trade, or my cost basis for when I got each coin to tell if that trade was a loss, gain, or wash. There was truly no way to be honest about those trades. Luckily I was only playing with small potatoes, it would be a nightmare if I traded in amounts the IRS would care about.

Re: 48-nation bloc to crack down on using crypto assets to avoid tax

#110

Post by I_Am_Nous »

fwungy wrote: post #40

FX is the largest market in the world. It's about 30x global GDP. If BTC can take 1% of the FX market its value would be $1.5M, each. As the price of btc rises it becomes less volatile, which makes it more attractive for large transactions. Btc transactions settle without active third party involvement or approval. Btc, in particular, should be very attractive for International settlements in the future. That's why t…

Isn't this what XRP was intended for?
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