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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

#71

Post by notheguyouthink »

ISL wrote: post #67
notheguyouthink wrote: post #66

Earlier quoted context omitted.

> 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. For someone who knows nothing about tax law, if I draw the $15k back from Google to USD, would I pay taxes on the full 15k? This gains growth tax thing seems to make sense, if there is no taxes when converting it to USD. Eg, if I take 10k and make an additional 10k converting from BTC->ETH and pay taxes on that…

Capital gains taxes are paid only upon the gains, not the principal.

Well that makes me feel better, at least

Re: The IRS collects data on Coinbase account holders

#72

Post by rrdharan »

ulkesh wrote: post #38
cdoxsey wrote: post #35

Earlier quoted context omitted.

Even if they don't send you a doc you need to pay taxes on your earnings.

Of course, it's just what I expected since every other reputable investment business does this. However, my concern is less from that and more from the $30. Will they care?

It depends on your definition of “care”. As other comments have noted, you might get a letter. History suggests they would not be likely to attempt to prosecute you for tax evasion.

https://www.hrblock.com/tax-center/irs/tax-responsibilities/...

They do have a limited budget for enforcement and they prioritize accordingly.

Re: The IRS collects data on Coinbase account holders

#73

Post by asah »

mathgeek wrote: post #61
sp332 wrote: post #52

Earlier quoted context omitted.

But that's new with the new tax bill. It wouldn't apply to 2017 taxes.

1031 exchanges are indeed explicitly only for real estate starting in 2018. For 2017, it's best to consult a tax professional as the rules are somewhat unclear.

This is correct.

Re: The IRS collects data on Coinbase account holders

#74

Post by icelancer »

ulkesh wrote: post #34

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…

>> Should I be concerned that they'll try to get their $10 from me and then pile on a bunch of penalties?

No, despite their reputation, the IRS is pretty reasonable about stuff like this, at least in my experience. They're relentless if they think you owe a ton or were malicious, but they don't intentionally trump up penalties on the every day person.

Re: The IRS collects data on Coinbase account holders

#75

Post by matwood »

ulkesh wrote: post #34

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…

Probably not a huge concern, but I look at it this way. Is it worth your future time to deal with over ~$10 in taxes? Is it something that can lead to triggering an audit?

Even if the chance of the IRS coming back to me is small, I'd much rather pay the $10 now than deal with them later.

Re: The IRS collects data on Coinbase account holders

#76

Post by godelski »

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.

Just a note, but if you don't hold on to them for more than a year then you calculate them like normal income. Long term assets (>= 1 year hold) are calculated at the reduced rate.

But I also agree that you shouldn't have to calculate it. I'm in favor of return free filing.

Re: The IRS collects data on Coinbase account holders

#77

Post by cmpxchg »

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.

It's not just Intuit and H&R Block. A lot of us small business owners don't want the IRS knowing every detail of our businesses in order to just magically send us a pre-filled return each year.

The current tax system places responsibility on you, the investor, to tabulate all of your gains and losses, but it also gives you the freedom to invest in complex and unusual transactions like coins in the first place. Don't be so quick to assume you could give up the one without giving up the other, were it not for those pesky TurboTax lobbyists.

Re: The IRS collects data on Coinbase account holders

#79

Post by godelski »

otoburb wrote: post #68
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.

>>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. Unlike stocks which seem to be entirely traded on exchanges, bitcoin could have been obtained through mining (unlikely, but possible) or a true person-to-person trade/barter. In order to calculate capital gains, one needs to know the cost-basis (i.e. the pri…

Couldn't you use the cost of operation? I figure you could either keep track of it yourself or use a standard depreciation rate on equipment and electricity costs (since probably few people tracked that). Would be like running a business, which you kind of are as a miner. But you do make a point that this is a difficult thing and coinbase can't really track it.

BUT from what I understand, people leave a lot of coins on exchanges and never transfer them back to personal wallets. Coinbase can track that.

Re: The IRS collects data on Coinbase account holders

#80

Post by RealAnalysis »

ulkesh wrote: post #34

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…

what about $400 in gains?
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