Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Crypto investors face tax crackdown as 70% non-compliant

thepost.co.nz

Post reply on HN
Print view View original

31–40 of 92 posts

Re: Crypto investors face tax crackdown as 70% non-compliant

#31

Post by chii »

rsynnott wrote: post #18
kopirgan wrote: post #5

Article seems to suggest if you make gains but lost them later you still need to pay tax on the gain?! That's strange..

You buy a bitcoin for 20,000. You sell it for 50,000. At this point you probably owe capital gains on 30,000. You then take the 30,000, use it to buy an NFT, and later sell the NFT for 0.01 (because NFT). At this point you have had gain of 30k and loss of 30k. Now, it's going to depend a lot on exactly when all this happened and in which jurisdiction, but in many countries you probably owe tax on the 30k.

That doesnt seem logical - the purchase of the NFT is a capital loss, which should offset the gains of the 30k of capital gains. Otherwise, it's an unfair tax regime.

Re: Crypto investors face tax crackdown as 70% non-compliant

#32

Post by brendoelfrendo »

scotty79 wrote: post #4

> Doyle says many crypto investors mistakenly think they can sell some Bitcoin to buy some Etherium, and that making that a switch like that did not trigger an obligation to pay tax. Make a stupid rule, be surprised people are non-compliant.

This is how gains are taxed under most regimes? You pay the tax when you realize the value of the asset; in this case when you exchange one asset of one value (bitcoin) for another asset of a different value (etherium).

Re: Crypto investors face tax crackdown as 70% non-compliant

#33

Post by sigwinch »

fer wrote: post #21

Editing out because it can be misunderstood as a defense of tax evasion as per the child comment. I'll leave a quote from the cypherpunk manifesto instead > We the Cypherpunks are dedicated to building anonymous systems. We are defending our privacy with cryptography, with anonymous mail forwarding systems, with digital signatures, and with electronic money.

Please double-check your advice. Just because it’s not seen in a combobox within Canada, Ireland and Belgium doesn’t mean it’s invisible.

Re: Crypto investors face tax crackdown as 70% non-compliant

#34

Post by skeeter2020 »

kopirgan wrote: post #5

Article seems to suggest if you make gains but lost them later you still need to pay tax on the gain?! That's strange..

I don't know how a future loss is treated from a tax perspective (does the lost investment generate a capital loss?) but overall this seems to be similar to standard tax accounting.

Assuming an arms-length transaction: this would be like taking shares you own in one company and exchanging them for shares in another company. Typically you would sell them for money in-between but even if they were traded directly you would need to recognize the capital gain at the price you traded them, based on the current value of what you got for them. This would be applicable to the current taxation period, and if the new shares tank it could generate a capital loss.

Re: Crypto investors face tax crackdown as 70% non-compliant

#35

Post by kiba »

bryanlarsen wrote: post #15
scotty79 wrote: post #4

> Doyle says many crypto investors mistakenly think they can sell some Bitcoin to buy some Etherium, and that making that a switch like that did not trigger an obligation to pay tax. Make a stupid rule, be surprised people are non-compliant.

So what's a better rule that ensures those with wealth pay their fair share of taxes? All tax rules are unfair and distortionary and inefficient etc. You have to pick the least bad.

Land value tax is progressive, efficient and non-distortionary.

Re: Crypto investors face tax crackdown as 70% non-compliant

#37

Post by nathias »

mr_toad wrote: post #3

> However, gains made from trading assets, including property, were taxed, and that caught crypto investors as the dominant reason for buying crypto assets is to later sell make a gain, rather than holding them as a long term asset like a home, or rental property. Unfortunately what constitutes “trading” vs “holding” is ill defined in NZ law. At least with shares you can make a case you’re holding them for dividends,…

why not? there are lots of crypto that yields profit by holding it

Re: Crypto investors face tax crackdown as 70% non-compliant

#38

Post by scotty79 »

Glemkloksdjf wrote: post #12
scotty79 wrote: post #6

If a country gives you zero practical assurances when it comes to protecting your crypto assets, what is the tax for?

For making profit or gains. The state doesn't give you protection on you buying shares either. And if someone would steal your bitcoin, shares or whatever, the state would allow you to use the legal system to get it back. Its your issue if you use something which is inherant intransparent, partially anonmous and globally unregulated. The tax is there to pay streets, kindergarden, schools, etc. btw.

> The state doesn't give you protection on you buying shares either.

Of course it does. If somebody takes my money but doesn't give me shares they are going to jail. If you try that with crypto the police will laugh you off.

Re: Crypto investors face tax crackdown as 70% non-compliant

#39

Post by bryanlarsen »

kiba wrote: post #35
bryanlarsen wrote: post #15

Earlier quoted context omitted.

So what's a better rule that ensures those with wealth pay their fair share of taxes? All tax rules are unfair and distortionary and inefficient etc. You have to pick the least bad.

Land value tax is progressive, efficient and non-distortionary.

No it isn't. It's one of the best taxes, but it's still distortionary. It's also unfair, because it's incredibly easy to avoid. And it's also not sufficient.
Post reply on HN