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Does that mean Coinbase will give me a 1099 at the end of the year?
Just pray they don't give you a 1099 with grossly incorrect values like they generously did for me.
[1] https://www.irs.gov/businesses/understanding-your-1099-k
My only concern is that I bought Bitcoin for a friend because he had trouble setting his account up. Now that tax time is coming up, this has me worried that I'll get singled out because what I claim doesn't match my account. He's filing for his portion of things, so it should all work out in the end, but I don't want to be audited to have to explain that.
Earlier quoted context omitted.
Coinbase has already issued tax forms for those who owe capital gains taxes because of cryptocurrency sales. So this isn't in any way new or unexpected.
I don't think that is correct. They are issuing 1099-K's for people who are accepting Bitcoin payments through Coinbase. They haven't issued any 1099's for people who only have a capital gain from buying and selling.
Why fear a government agency with aging equipment and lack of employees due to continuous budget cuts by politicians who don't want their buddies audited? The IRS can't keep up with tax law changes and collect much of what they are supposed to collect already much less add new and more complex things to track.
Earlier quoted context omitted.
Coinbase has already issued tax forms for those who owe capital gains taxes because of cryptocurrency sales. So this isn't in any way new or unexpected.
I don't think that is correct. They are issuing 1099-K's for people who are accepting Bitcoin payments through Coinbase. They haven't issued any 1099's for people who only have a capital gain from buying and selling.
So if I made a whole $32 off of my experiment on Coinbase (invested $50 when the price was around $273.59/bitcoin and then sold when the price was around $459.69/bitcoin), will the IRS really care about their cut? I honestly expected some kind of documentation from Coinbase with respect to taxes, such as a 1099-B. I never received such a document. I also read somewhere that the IRS is only coming after people who mad…
The IRS once sent me a letter because I had slightly underpaid my taxes where they informed me of the amount I had underpaid and assessed a 10% penalty.... for a grand total of ~$8. They weren't jerks about it but they do seem to have a weird attention to detail for certain matters.
My only concern is that I bought Bitcoin for a friend because he had trouble setting his account up. Now that tax time is coming up, this has me worried that I'll get singled out because what I claim doesn't match my account. He's filing for his portion of things, so it should all work out in the end, but I don't want to be audited to have to explain that.
Why fear a government agency with aging equipment and lack of employees due to continuous budget cuts by politicians who don't want their buddies audited? The IRS can't keep up with tax law changes and collect much of what they are supposed to collect already much less add new and more complex things to track.
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…
They explicitly do consider crypto-to-crypto transactions as a taxable event now, as of the recent tax bill. You are required to pay taxes on it.
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…
> 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. This is called a "like-kind trade" which is IMO muddy for cryptocoins [1]. EDIT: oh yes, I see now that you cite 1031, oops. [1] https://www.forbes.com/sites/tysoncross/2018/02/19/the-truth...
The link you cited above covers this on page 4.
Keep in mind also that like-kind exchanges, if you're going to use them this year and for prior year reporting, require you to claim them explicitly on your taxes [1].
[1] https://www.forbes.com/sites/robertwood/2017/11/27/tax-bills...