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The IRS collects data on Coinbase account holders

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Re: The IRS collects data on Coinbase account holders

#141

Post by mcherm »

otoburb wrote: post #114
jmalicki wrote: post #110

Earlier quoted context omitted.

"Unlike stocks which seem to be entirely traded on exchanges" - no. You could have bought stock directly from the company, in an IPO or secondary offering (where it does not go through an exchange), from an individual or broker not intermediated by an exchange, etc. You can keep stock certificates in a safe deposit box, and then later transfer them into your brokerage account, they have no idea what you paid for them…

Thanks for the clarification. To whit, the few retail equity US and Canadian trading platforms I've used (Schwab's, Interactive Brokers, Scottrade before they became TD Ameritrade, Questrade) also do not provide an explicit feature that purports to calculate capital gains, so Coinbase seems to be exhibiting feature parity with equity retail exchanges. Coinbase and other retail equity trading platforms do provide an e…

> To whit, the few retail equity US and Canadian trading platforms I've used (Schwab's, Interactive Brokers, Scottrade before they became TD Ameritrade, Questrade) also do not provide an explicit feature that purports to calculate capital gains

I cannot account for the discrepancy, but I use Charles Schwab, and it absolutely DOES calculate and display capital gains. In cases where I have moved a security into the account (rather than purchasing it directly within the account) I have had to provide original cost basis information for them in order for the calculations to be correct.

Re: The IRS collects data on Coinbase account holders

#142

Post by dmoy »

redspectre wrote: post #108
davidgh wrote: post #27

One of the tax implications I’ve often thought about is those that heavily trade among different cryptos. If I buy $10k of Intel, it grows to $15k and I sell it to buy $15k of Google, I owe tax on the $5k gain. Now, perhaps one could argue that there is no “liquidity” event by trading one crypto for another. But perhaps the IRS argues there is a phantom liquidity event during such a trade. The IRS generally doesn’t l…

The problem is, USD is the only legal tender. When I sell Intel stock, that where I made profit in USD. I pay tax on that. But if I trade BTC for DOGE, I haven't made any money. All I have done is swap tokens. And just because someone would pay X dollars for tokens, doesn't mean I made any money. I mean where does it end? If I tell you I'll pay you 10000 dollars for the pocket lint in your pocket, did you just make a…

If lint is something people are commonly buying, selling, speculating on, sure. Otherwise no.

Re: The IRS collects data on Coinbase account holders

#143

Post by dmoy »

davidgh wrote: post #121
redspectre wrote: post #108

Earlier quoted context omitted.

The problem is, USD is the only legal tender. When I sell Intel stock, that where I made profit in USD. I pay tax on that. But if I trade BTC for DOGE, I haven't made any money. All I have done is swap tokens. And just because someone would pay X dollars for tokens, doesn't mean I made any money. I mean where does it end? If I tell you I'll pay you 10000 dollars for the pocket lint in your pocket, did you just make a…

Profit or gain may be measured in USD, but a transaction does not need to include USD to generate a taxable gain. The IRS has all sorts of rules involving barters, meaning trading one asset for another without USD being involved in the transaction at all. [1] Say you buy a car for $10k, let it sit in your garage for 30 years and it now becomes a classic vintage worth $30k. If you go and trade that car for a new motor…

Or actually if it was literally pocket lint, y'all could probably get away with having the payer file form 709 and the seller doing nothing, and nobody would owe any tax.

Re: The IRS collects data on Coinbase account holders

#144

Post by otoburb »

patio11 wrote: post #134
otoburb wrote: post #114

Earlier quoted context omitted.

Thanks for the clarification. To whit, the few retail equity US and Canadian trading platforms I've used (Schwab's, Interactive Brokers, Scottrade before they became TD Ameritrade, Questrade) also do not provide an explicit feature that purports to calculate capital gains, so Coinbase seems to be exhibiting feature parity with equity retail exchanges. Coinbase and other retail equity trading platforms do provide an e…

To whit, the few retail equity US and Canadian trading platforms I've used (Schwab's, Interactive Brokers, Scottrade before they became TD Ameritrade, Questrade) also do not provide an explicit feature that purports to calculate capital gains You should probably call the IRS tipline and say "I think [Schwab] isn't filing their 1099-Bs, you know the thing which reports cost bases and short-term/long-term capital gains…

>>Or, in the alternative, you could look again.

I checked again, and you're right. Interactive Brokers is the only platform I still infrequently use but it does have a list of pre-filled tax forms available for download. Worksheet 8949 is also pre-filled, but this is probably where one would need to submit a revised version if previous cost-basis amounts need to be adjusted as in the specific edge cases we're talking about above.

Coinbase seems to have sent 1099-K documents to eligible customers which isn't as detailed as 1099-Bs since I believe the Ks only report gross transaction volumes over $20K[1].

[1] https://www.irs.gov/businesses/understanding-your-1099-k

Re: The IRS collects data on Coinbase account holders

#145

Post by Legogris »

ceejayoz wrote: post #118
skellera wrote: post #107

Earlier quoted context omitted.

That creates a one way correction relationship. You will always let them know if you owe them less but never if you owe them more.

I'd imagine there'd be a "do you have unreported income or other unusual situations to disclose" step that'd open you to prosecution if you deliberately omitted stuff. It's not like they wouldn't do audits any more.

What OP is saying is that it's in the government's to keep things as they are, since if you overestimate your taxes by e.g. missing out on deductions, they won't have to make a correction on that.

Re: The IRS collects data on Coinbase account holders

#146

Post by user5994461 »

awalton wrote: post #133
lkbm wrote: post #56

Could the IRS do me a solid and send me what the capital gains on my crypto currency are? I'll pay the taxes--I just don't want to have to calculate the taxes. I know, I know. Intuit and H&R Block refuse to allow that to happen, but if we could stop prioritizing entrenched industries, that'd be really nice.

> I'll pay the taxes--I just don't want to have to calculate the taxes. You, me and most everyone else reasonable. In some countries, taxes are as simple as the tax agency sending you a bill or a check. But, America's love of excess capitalism means our tax code is needlessly complicated and pretty much insists on as many third party businesses to be involved as possible - every company you work for, plus anyone hold…

In France, taxes are impossible to calculate. Every accountant will give you a different number for a few percents.

If the state didn't give a bill, you couldn't figure out what to pay.

Re: The IRS collects data on Coinbase account holders

#147

Post by dillondoyle »

I've wondered what to do if I won't or can't prove that I control BTC that I transferred out of coinbase wallet into personal wallets?

I will definitely pay my cap gains on the small amount of coin I sold (BTC->USD within coinbase). But I have no idea about first in first out, when is it a wash if I buy more?

I don't even want to think about trying to calculate cap gains on purchases made with BTC since the price is almost always different even if I buy BTC on coinbase and use it to buy server time 60 minutes later..

Re: The IRS collects data on Coinbase account holders

#148

Post by Analemma_ »

Legogris wrote: post #145
ceejayoz wrote: post #118

Earlier quoted context omitted.

I'd imagine there'd be a "do you have unreported income or other unusual situations to disclose" step that'd open you to prosecution if you deliberately omitted stuff. It's not like they wouldn't do audits any more.

What OP is saying is that it's in the government's to keep things as they are, since if you overestimate your taxes by e.g. missing out on deductions, they won't have to make a correction on that.

[citation needed]. The IRS has asked repeatedly to introduce return-free filing, only to be blocked by Congress after their paymasters at Intuit and H&R Block voiced discontent with the possibility of their revenue stream being shut off.

Re: The IRS collects data on Coinbase account holders

#149

Post by pembrook »

AboutTheWhisles wrote: post #130
lkbm wrote: post #56

Could the IRS do me a solid and send me what the capital gains on my crypto currency are? I'll pay the taxes--I just don't want to have to calculate the taxes. I know, I know. Intuit and H&R Block refuse to allow that to happen, but if we could stop prioritizing entrenched industries, that'd be really nice.

"How much do I owe?" "How much do you THINK you owe?" "...Hmm, if I have everything correct, I think I owe this much" "WRONG! Time for consequences!"

Time for consequences 2 years later when our system finally processes your return and you've long since forgotten where you put that receipt for an $8 taxi ride.

One of the biggest frustrations of modern life is knowing how efficient and easy things could be if these systems were designed better...and then realizing that nothing will be done about it because entrenched interests hold all the power in American government.

Re: The IRS collects data on Coinbase account holders

#150

Post by univalent »

Asking for a friend. If X buys a few bitcoin and then transfers it to a gambling site and proceeds to lose it all does stupid X (the goddamn idiot) owe any taxes? The only way X can show that he/she didn't retain the bitcoin is to show transfers to the gambling website (transfers in and no transfers out, because as I said earlier, X is a dumbass).
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