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Title: how do traders on mtgox/coinbase report their taxes? Post by: beetcoin on November 08, 2013, 10:58:12 PM how do you pay capital gains taxes on bitcoins when you can buy coins off a different exchange, transfer the coins into your account, and sell?
Title: Re: how do traders on mtgox/coinbase report their taxes? Post by: DeathAndTaxes on November 08, 2013, 11:00:35 PM how do you pay capital gains taxes on bitcoins when you can buy coins off a different exchange, transfer the coins into your account, and sell? I would guess most don't. :) However moving BTC between exchanges has no effect on capital gains. If you buy a BTC @ $100 and sell a BTC @ $250 you have a $150 capital gain. The withdrawing or depositing of coins on an exchange isn't a taxable event. Similarly people transfer stocks and cash balances between brokerage accounts all the time. Title: Re: how do traders on mtgox/coinbase report their taxes? Post by: beetcoin on November 08, 2013, 11:22:40 PM how do you pay capital gains taxes on bitcoins when you can buy coins off a different exchange, transfer the coins into your account, and sell? I would guess most don't. :) However moving BTC between exchanges has no effect on capital gains. If you buy a BTC @ $100 and sell a BTC @ $250 you have a $150 capital gain. The withdrawing or depositing of coins on an exchange isn't a taxable event. Similarly people transfer stocks and cash balances between brokerage accounts all the time. a lot of guys buy lower, usually lower than bitstamp price.. and then they sell on mtgox, probably at or around their spot price.. wouldn't they have to report this with the IRS? that would be a huge mess, wouldn't it? they'd have to prove their buy/sell price for every exchange... Title: Re: how do traders on mtgox/coinbase report their taxes? Post by: Lauda on November 08, 2013, 11:26:40 PM how do you pay capital gains taxes on bitcoins when you can buy coins off a different exchange, transfer the coins into your account, and sell? I don't know about others, but I just don't. Title: Re: how do traders on mtgox/coinbase report their taxes? Post by: DeathAndTaxes on November 08, 2013, 11:27:08 PM Yes. It doesn't matter where you buy it though. The only events the IRS is interested in are the buys and sells, not that you withdrew the coins and sent them to cold storage and then moved it to your hot wallet, and then deposited it to another exchange, and then changed your mind and moved it to another exchange.
If you buy 1 BTC for X and then sell 1 BTC for y the capital gain (or loss) if x-y If you want to keep accurate records for tax time you need a record of all your buys and sells on all exchanges and consolidate them together. Deposits and Withdrawals are irrelevant. Title: Re: how do traders on mtgox/coinbase report their taxes? Post by: Gator-hex on November 08, 2013, 11:44:37 PM You do have to report capital gains! :o
Otherwise you'll end up like Peter Schiff's dad, in prison for not paying your taxes! Once you sell bitcoins for profit and turn them back into fiat $ that's a capital gain. (you can offset it against your losses though) What will blow peoples minds... USA even taxes barter trades! If you run a bitcoin only store in the US you will still have to pay taxes even if no $ change hands! |