Tax implications for crypto

Discussion of all things crypto and blockchain.
silverpv
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Re: Tax implications for crypto

Postby silverpv » Mon Jun 11, 2018

Bucketeer wrote:
Long John wrote:
Bucketeer wrote:
silverpv wrote: I hear they are a bit busy trying to figure out what to do for 2018. It’s going to be interesting..


2017 will be a wash, 2018 will have regulations.

Now you tell me. :lol: I paid a fair bit of taxes on my 2017 crypto activity. It would be just my luck if the IRS wasn't really paying attention yet.


I paid more taxes than I deserved. Crypts are currency, not assets.

Seriously....if I move Bitcoin from my KeepKey to a softwallet in order to update the KeepKey firmware, is that really a transaction?

Where is John McAfee when you need him?

I'd hate to be a trader. Schedule D nightmares. HODL


If you're worried about multiple tx's, just get another keepkey as a backup. Upgrade the firmware on one and test your backups. You shouldn't have to move your funds if you have tested you backups. The funds are on blockchain, not on the device. If you have only 1 keepkey you run the risk on bad hardware or loss. Total prepper fundies, 2 is 1, 1 is none here.

As far as taxes, i'd rather make sure they don't come knocking on my door, pay the man. If they see i overpaid, i'm not on the list when they match me up with the coinbase/bittrex list.

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Bucketeer
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Re: Tax implications for crypto

Postby Bucketeer » Mon Jun 11, 2018

I'm not worried about multiple tax entries, but it's just about entering another Schedule D entry for recordkeeping. Good advice about getting another KeepKey. At least I'll get a 1099 from Coinbase next year.

What happened yesterday? A $1K drop? WTF??? Must have been Wall Street, HODLers aren't selling.
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Recluse
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Re: Tax implications for crypto

Postby Recluse » Mon Jun 11, 2018

Bucketeer wrote:
Seriously....if I move Bitcoin from my KeepKey to a softwallet in order to update the KeepKey firmware, is that really a transaction?


What convinced you that move is a reportable/taxable transaction? Everything that I read leads me to believe it is not.

silverpv
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Re: Tax implications for crypto

Postby silverpv » Mon Jun 11, 2018

Recluse wrote:
Bucketeer wrote:
Seriously....if I move Bitcoin from my KeepKey to a softwallet in order to update the KeepKey firmware, is that really a transaction?


What convinced you that move is a reportable/taxable transaction? Everything that I read leads me to believe it is not.


When you send money out of a wallet, that currently is counted as a "sale" because the IRS doesn't know if you sold it or transferred it to yourself. When it hits the receiving wallet it counts as a "buy" since its incoming and should wash but you still get dinged for cap gains if you transfer wallet to wallet in less than 1 year. It's a little annoying right now, but that's the way its recorded currently.

Right now unless you do it manually, only you know what's yours since you're your own bank and have to report it yourself vs. the banks and companies that do it for you and send you a 1099. In current systems a wallet address is another bank account and since you are managing that account its your duty to report. There's no concept of multiple accounts under a single user in crypto. This is part of the complications of the space.

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Bucketeer
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Re: Tax implications for crypto

Postby Bucketeer » Mon Jun 11, 2018

Recluse wrote:
Bucketeer wrote:
Seriously....if I move Bitcoin from my KeepKey to a softwallet in order to update the KeepKey firmware, is that really a transaction?


What convinced you that move is a reportable/taxable transaction? Everything that I read leads me to believe it is not.


Schedule D rules and regs. Maybe I'm overdoing it, but I've done the IRS dance twice and don't want a 3'rd.
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Recluse
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Re: Tax implications for crypto

Postby Recluse » Tue Jun 12, 2018

Bucketeer wrote:
Recluse wrote:
Bucketeer wrote:
Seriously....if I move Bitcoin from my KeepKey to a softwallet in order to update the KeepKey firmware, is that really a transaction?


What convinced you that move is a reportable/taxable transaction? Everything that I read leads me to believe it is not.


Schedule D rules and regs. Maybe I'm overdoing it, but I've done the IRS dance twice and don't want a 3'rd.


Can you point me to a source for these rules?
They make it clear that it is to be treated as property. I cannot find where the IRS has specified that a transfer of your property from one location to another and remains your property is a taxable event. I realize that Coinbase includes all transfers in their generated reports because you "may" be transferring your property to someone else. This is the most recent document from the IRS that I have found pertaining to cryptocurrencies. https://www.irs.gov/pub/irs-drop/n-14-21.pdf It doesn't mention the movement of your property thats remains your property.

At this time this does not affect me one way or another. I do think it is important to have a definitive answer because right now that transfer may result not only in a huge gain, but for some a huge loss. Incorrectly reporting a huge loss can be a pretty bad thing.

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Bucketeer
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Re: Tax implications for crypto

Postby Bucketeer » Wed Jun 13, 2018

Gentlemen prefer Engelhard.

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tdtwedt
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Re: Tax implications for crypto

Postby tdtwedt » Sat Jul 27, 2019

IRS Sends 1000s Of "Fishing" Letters To Crypto Users

Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties,” IRS Commissioner Chuck Rettig said in a statement.

“The IRS is expanding our efforts involving virtual currency, including increased use of data analytics. We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations.”


https://www.zerohedge.com/news/2019-07- ... ypto-users
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tdtwedt
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Re: Tax implications for crypto

Postby tdtwedt » Wed Aug 14, 2019

Cryptos Just Collapsed As IRS Deadline Looms

A month ago, the IRS sent letters to thousands of crypto investors to clarify crypto tax filing requirements and, in certain cases, compel them to pay back taxes.

As CoinTelegraph reports, those who already received letter 6173, titled “Reporting Virtual Currency Transactions” on July 16 now have less than a week to reply to the IRS. The most serious of the trio of letters that were disseminated (sent alongside letters 6174 and 6174-A), 6173 requires immediate action.

If recipients do not respond to this letter in time, their tax accounts will be audited by the IRS. Recipients are required to respond to this letter within 30 days of the date listed on the letter and requires all crypto transactions between the years of 2013 to 2017 be reported. Reports must include transactions between wallets and exchanges.

And some have suggested the sudden dump this morning across all cryptos could be related to this tax date.


https://www.zerohedge.com/news/2019-08- ... line-looms
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Re: Tax implications for crypto

Postby tdtwedt » Sun Aug 25, 2019

Internal Revenue Service Sends New Round Of Letters To Crypto Holders

Last week, the United States Internal Revenue Service sent another round of letters to crypto traders called CP2000. These notices were sent to traders of some crypto exchanges due to inconsistencies found in their tax reports.

Using the information provided by third-party systems — such as crypto exchanges and payment systems — the IRS has been able to determine the amounts traders owe and included the amounts in dollars in the notices. Individuals who have received these notices are required to pay within 30 days, starting on the delivery date indicated in the letter.


https://www.zerohedge.com/news/2019-08- ... to-holders
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tdtwedt
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Re: Tax implications for crypto

Postby tdtwedt » Sun Oct 13, 2019

IRS Adds Question On Crypto Usage To New Income Tax Form Draft

The United States Internal Revenue Service (IRS) has added a question on crypto ownership to the standard 1040 income tax form for the coming tax season.

“At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”


https://www.zerohedge.com/crypto/irs-ad ... form-draft

:pop:
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Re: Tax implications for crypto

Postby Purple and Gold » Sun Oct 13, 2019

:shock:
ImageImageImage

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Bucketeer
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Re: Tax implications for crypto

Postby Bucketeer » Sun Oct 13, 2019

tdtwedt wrote:IRS Adds Question On Crypto Usage To New Income Tax Form Draft

The United States Internal Revenue Service (IRS) has added a question on crypto ownership to the standard 1040 income tax form for the coming tax season.

“At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”


https://www.zerohedge.com/crypto/irs-ad ... form-draft

:pop:


The IRS has deemed crypto to be a commodity. Now they call it a currency, WTF? The US Treasury Dept considers it as currency, and has sold it as currency.

If you trade, fill out your Schedule D's and pay the tax. Bitcoin and crypto is a Congressional issue to determine exactly what it is.

HODL your coins, don't trade, and just wait this out.

Last edited by Bucketeer on Sun Oct 13, 2019, edited 1 time in total.
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SilverDoge
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Re: Tax implications for crypto

Postby SilverDoge » Sun Oct 13, 2019

tdtwedt wrote:IRS Adds Question On Crypto Usage To New Income Tax Form Draft

The United States Internal Revenue Service (IRS) has added a question on crypto ownership to the standard 1040 income tax form for the coming tax season.

“At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”


https://www.zerohedge.com/crypto/irs-ad ... form-draft

:pop:


Yawn. The more they write tax law for crypto, the more mainstream and legitimized it becomes. One could argue that it won't get full adoption until tax uncertainty is worked out. Perhaps a double-edged sword for the taxing elites.
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Bucketeer
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Re: Tax implications for crypto

Postby Bucketeer » Sun Oct 13, 2019

Yep Doge, +1
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tdtwedt
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Re: Tax implications for crypto

Postby tdtwedt » Fri Dec 06, 2019

The IRS has a new tax form out and wants to know about your cryptocurrency

The IRS released a new form you’ll need to complete your 2019 tax return. The agency is asking whether you’ve acquired, exchanged or sold a financial interest in virtual currency.

Earlier this year, the IRS sent letters to taxpayers who’ve made virtual currency transactions, telling them to pay back taxes and file amended returns.


https://www.cnbc.com/2019/12/06/the-irs ... rency.html
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silverpv
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Re: Tax implications for crypto

Postby silverpv » Thu Dec 12, 2019

tdtwedt wrote:The IRS has a new tax form out and wants to know about your cryptocurrency

The IRS released a new form you’ll need to complete your 2019 tax return. The agency is asking whether you’ve acquired, exchanged or sold a financial interest in virtual currency.

Earlier this year, the IRS sent letters to taxpayers who’ve made virtual currency transactions, telling them to pay back taxes and file amended returns.


https://www.cnbc.com/2019/12/06/the-irs ... rency.html


Fortunately the people here pay all taxes that are legally owed!

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tdtwedt
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Re: Tax implications for crypto

Postby tdtwedt » Mon Jan 27, 2020

It’s tax season and the IRS wants to know about your crypto. How to prepare

https://www.cnbc.com/2020/01/24/why-the ... eason.html

:pop:
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jcz1
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Re: Tax implications for crypto

Postby jcz1 » Thu Feb 27, 2020

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."

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Re: Tax implications for crypto

Postby IdahoCopper » Fri Feb 28, 2020

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.


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