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Bitcoin and taxes


FrogFries
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Form asks you flat out if you owned, transferred, held etc 

Every single exchange is a taxable event.  It’s a PITA.  Extremely simplistically, If you bought at $1 and transferred to book when it was $2 you have to claim a $1 gain. Every time you moved it to book or cashed it out, you have to figure price at x date and time and determine gain/loss. 
 

if you used it to buy a cup of coffee, same thing. 

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1 hour ago, IAG said:

Form asks you flat out if you owned, transferred, held etc 

Every single exchange is a taxable event.  It’s a PITA.  Extremely simplistically, If you bought at $1 and transferred to book when it was $2 you have to claim a $1 gain. Every time you moved it to book or cashed it out, you have to figure price at x date and time and determine gain/loss. 
 

if you used it to buy a cup of coffee, same thing. 

Tax preparers are going to make a fortune from people not understanding how the government is taxing crypto

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1 hour ago, HinesWard86 said:

Tax preparers are going to make a fortune from people not understanding how the government is taxing crypto

Yep!   Accountants don’t even want to mess with it tho they have had a few years to get used to it.. there is crypto tax software, and now the exchanges can provide more documents,  but interpreting that information has to be tough for most esp if you are using multiple exchanges....send to books etc....Every time you swap BTC into an alt it is a taxable event. I just do the best I can.   One of the primary reasons I stopped trading in 2018 and 19 now. Too much money to be made now though to worry about it. I’ll deal with it when the time comes.   No one wants to do audit that shit anyway...lol.   I made a thread about it years ago when the IRS clarified like-kind exchange rules. It caused quite the uproar,  but you could technically still claim like kind exchange with trading eth into BTC etc for tax year 2017...now you would have a tough time making that argument.  If you did, you would lose. 

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Yes. A profit of any amount needs to be reported to the IRS. For the first time, this tax season’s 1040 form includes a question about virtual currencies on the front page asking taxpayers if “at any time during 2020, did [they] receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”

“The IRS thinks there’s massive, massive underreporting in this area,” Ryan Losi, a certified public accountant (CPA) with Piascik tells Make It. “And they’re going to start targeting it.”

Indeed, the cryptocurrency question is the first item on the 1040 form, just below the individual’s contact information.

In the past, taxpayers may have been able to feign ignorance about their obligation to report crypto gains, but that won’t fly anymore. “Everyone who signs the tax return is signing that under penalty of perjury from the U.S. government,” Losi says. “Now folks can’t say ‘I didn’t see the question’ or ‘it was buried on the document.’”

https://www.cnbc.com/2021/02/19/do-you-owe-taxes-on-bitcoin.html

 

Just saw this article today.  PSA only. Not financial advice. No judgment, just information.

 

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