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Tax implications for crypto

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SilverDoge
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Location: Kansas

Re: Tax implications for crypto

Postby SilverDoge » Fri Feb 28, 2020

IdahoCopper wrote:
jcz1 wrote:For anyone interested ... I was just doing my taxes today using the H&R Block software, and came across the crypto question. Curious, I clicked on Learn More, and this is what H&R says about the question:

Why does this matter?
If you had a transaction involving virtual currency in 2019, you'll need to report it on your return.

A transaction involving virtual currency includes:

Receipt or transfer of virtual currency for free (where you didn't pay or give up anything for it), including from an airdrop or following a hard fork
Exchange of virtual currency for goods or services
Sale of virtual currency
Exchange of virtual currency for other property, including for another virtual currency
Here's where to report it:

If your virtual currency was a capital asset, use Schedule D to report any gain or loss.
If you were paid with virtual currency, you'll need to report it as income on a W-2 or Schedule C.
If you didn't have any virtual currency, just choose No.

To learn more, visit http://www.irs.gov and search for "Virtual Currency FAQs."




Thus, simply exchanging your FRNs for BTC (buying, purchasing BTC) is not an event where you are required to select "yes" for the question.


I'm in agreement with this assessment. The IRS doesn't tax you when you buy personal property (not counting sales tax). The tax comes (as a capital gain) if/when you sell that property for a profit.
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IdahoCopper
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Joined: Fri Jun 07, 2019

Re: Tax implications for crypto

Postby IdahoCopper » Sat Feb 29, 2020

It is interesting how the question obfuscates this truth. The IRS wants you to ASSUME you must tick YES, instead of the understanding truth of the actual question, and the reasons behind it.

The real reason they obfuscate is they want you to volunteer information that they can or will use against you. This theme is rife all throughout Title 26, the Tax Code.


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