Bitcoin Forum

Do I need to pay taxes if I sell an alt coin for bitcoin then rebuy a different alt coin. I never took out actual USD so I am unsure how that would work. Or am I only taxes on actual USD made when I cash out?

Yes, actually you need to pay taxes, but I think the actual need of paying a tax occurs when you will buy USD(or your local currency). Then you need to declare the trade and pay the according tax, if such tax exist in your country.

It actually depends on how you are selling your bitcoins. It depends on whether your local exchange includes taxes on your buy/sell. If I need some money then I sell my Bitcoins to my close friend and he pay me in cash so I don't pay any taxes right now.

If you turn any of your coins into usd or your local currency, depending on your country's laws you have to pay taxes but if you exchange cryptocurrencies you don't need to pay taxes.

Just to the exchanges. Your government has nothing to do with it. That's why they don't want you to do that exchange.

No, you just need to pay the trading fees which was for the services of exchanges.

Paying tax for your btc transactions is not reasonable. It's not the property of your country or government. You shouldn't pay tax for this transactions. bitcoin is decentralized and nobody can claim tax from you, remember this. Governments should take their hands over bitcoin.

When you buy or sell bitcoin on an exchange
there are no TAXES involved just transaction fees
for the MINERS to process your order,
as YYmeans posted above.

When you want to CASH-OUT into your bank account
that is when you will be {possibly} liable for taxes,
this depends on your country, you will more than likely
be allowed a certain amount TAX-FREE.

I started a thread about this mindset of not paying taxes,
who is funding the Healthcare, Education, Public Services and Welfare?
We are in our respective countries!

Taxes have to be paid to keep our country running and also to pay
for useless politicians  ;D!

https://bitcointalk.org/index.php?topic=2063676.msg20623866#msg20623866

I don't think you should be asking for tax advice on a public forum, as I doubt anyone here is qualified to answer your question.  Also, it all depends on your country and also what profit you generated.  If you're sitting on a cool $3 profit then it's not going to be looked at... but if by some blessing you're cashing out $10-million then yes you'll need to figure out how to get that into cash and pay taxes on it.  At that extreme example I'd hope you pay for an accountant to walk you through all the legal issues.

I change coins in the app Shape Shift. There is a fixed price.

If so, everyone have to pay huge amount of taxes. Only profit you have made matters when you will pay taxes.

To be particular, no one needs to pay taxes on government when they are buying, selling and rebuying. All one needs to pay is the exchange fee that they automatically deduct whenever one initiates a transaction. Trading is taxable only when one is withdrawing profits. Even if it seems one isnt required paying tax for conversion of fiat, they still pay for tax via the service that they will use to get the fiat although it is lesser than the required.

to most exchange, maybe we pay no taxes only when we deposit, buy/sell or withdraw all shall pay taxes, some exchange's rate is very high, i think this taxes is too high to against the blockchain original intention:

I never heard any country is taxing bitcoin, so i don't think you have to pay tax when you are exchanging altcoin for bitcoin and vice versa.
However when you are exchanging bitcoin to your international currency you have to pay tax, and how much tax you have to pay that is something you will need to ask your tax administration.

You need to pay a little task to convert your altcoin for bitcoin, i meant the order tax + transaction fees. That's already including all of the tax by exchange your altcoin into the bitcoin itself.
You must pay for that but don't worry that just a little amount. Just like a penny.

You just have to pay for the fees, i think every exchanges  are the same to you.

Ya I am not taking out any actual dollars. Was just talking about doing trades within exchanges. Sorda like reinvesting my alt gain to bitcoin then to another alt to make more gains. At no time am I actually transferring money to my bank account. This exchanging does bring up another matter of how it would effect capitol gains due to not technically having that specific coin for at least a year.

I think you will pay the trading fees, not the taxes since the fees will be paid to the exchanges, while taxes is paid to the government. Different exchanges may have different fee ratio, you'd better to check that before trading altcoins.

you don't need to pay taxes when you sell for altcoin or for bitcoin, only when USD or other fiat money are involved you need to pay taxes, but it's better to see your country laws, because there could be some exception

You just have to trade it on an exchange site and they might charge you a small fee, besides which the only other fees would be transaction fees while converting BTC to USD. In fact you should actually be paying taxes to your government which I don't exactly know how it reaches them.

This.
Just switching currencies does not make you tax liable, just cashing out.

When you do make cashouts it does have tax depending on the exchange as far as i know when we are talking about USD but talking about switching from altcoin to convert it to Bitcoin then theres no tax on it and its just a simple tax which is being charged by exchanges which isnt really big at all to be worried off. Heres in my wallet local provider i can exchange and cashout bitcoins without being taxed.

if you are us citizen you need to pày a tax any alt or bitcoin you have, but if you in indonesia, as long as you are got caught you have many btc or altcoin you did not need to payany tax, is that nice ? thats why i love my country

Can someone confirm if this is true?  So when you trade btc for altcoins like lisk for example.  You make profit and then sell those lisk back to btc.  If u do not convert the btc into fiat... and use that btc to buy other coins and trade over and over again but never convert it to fiat, is there any tax liability?  The thing that is confusing is how do you even calculate this profit since this profit would be in terms of btc?  And the btc price is constantly changing?  So your 1k profit right now... could be 900 one day or 1300 later on etc.  So if you keep it as btc, there is no tax liability until you cash out?

It depends on the tax code in your country. If you are unsecure about it google it for yourself.

I don't think there is a need  to pay tax for selling an altcoin into bitcoin. As we have freedom and it is decentralized but as far as I know were talking on selling alt to btc it does not require to pay taxes.

yes in every transaction using altcoin or bitcoin transfer it into another wallet or cashout your bitcoin to convert in your local money i think taxes including at the transactoin fees, just correct me if iam wrong the idea about bitcoin taxes pay to government.

It depends on the law of your country and if you don't pay the taxes if there is a law. You could be in a huge problem and probably fined.

It all depends on where you live. In some countries you might have to, in others you don't. Some countries have different laws regarding cryptocurrencies, e.g. mining them, requires you to pay tax whereas trading them and making profit, doesn't require you to pay any.

agree if depends from each place we belong as for us we don't pay any taxes because bitcoin is not yet been truly recognize from where I lived
but in some instances I think when using bitcoin to purchase or to pay some bills taxes has been provided by the local exchange.

Okay so far i havent gotten an answer yet still on this.  So btc to lisk.  Then lisk increase in profit and you trade back to btc.  What happens here since you never converted to usd?

Exchanges just charge trading and transaction fees but if you make profit by trading a coin, then you have to pay taxes to cash out it. You can also buy some properties, cars, jewelry with bitcoin directly if you don't want to withdraw usd.

First off, I'm not an accountant or Tax advisor ... secondly, I'm assuming this a question of US law.

That said, here is my understanding.  If you have profits off the sale, you may owe income tax in the form of capital gains.  It doesn't matter if you cash out to USD or not.  You can keep good records of this and pay that capital gains tax every year you have profits.

But, there is a thing called "like kind exchange" where if you sell something, and buy something very similar, you don't owe taxes for that year.  If you sell a stock (any stock), and but other stock (any stock), or if you sell an investment property and buy another property, those may qualify as like kind exchanges.  I assume selling cryptos would follow the same rules.

However, you do you need to keep track now of your original buy, your exchange, then your sell.  You can theoretically string multiple buys and sells together into an perpetual chain of like kind exchanges.  But, you need to keep track of everything, because you'll eventually owe capital gains taxes on the entire chain.  And there are many IRS rules on how to handle a like kind change that people should talk to qualified accountants and tax advisors about.  You can get in trouble with the IRS if you handle the process improperly.

Well say you are trading btc for lisk.  Let say you bought 5k worth of lisk with your 5k btc.  You then sold the lisk for 1k worth of profit.  The profit is 1k worth of btc at that moment.  You keep the btc in your wallet.  You do not cash it out in fiat.


Is there a tax or not?  I read online that accountants seem to say yes that counts since you made profit.  Others say there isn't unless you convert it into btc.  


So what is the answer here?  The other thing is ... so the profit would be the btc amount made at that time?  So you made 1k profit worth of btc at the price of sale.  However, that 1k profit in btc could be 800 or 1100 later on etc.  So it gets recorded at that point of sale?  This doesn't make sense because if you only made that 1k profit, then when you report it on taxes, say that 1k profit worth of btc that day is now only worth 850... then how are you even recording 1000 when that btc price is now 850?  

Well the thing is this.  If you dont pay any capital gains until you convert it to fiat, that is very easy.  Because you could trade for a very long time and make profit but dont need to pay anything until you cash out.  That makes it very simple to understand.


The issue is if you are suppose to count it every transaction, you have to convert the btc to usd amount at the point of sale?  But how is that a 1k gain then if that 1k worth of btc could be 750 later on etc?  So if someone made say 50k worth or profit doing many trades... let say all those btc profit add up 50k total on that day of the trade... if that 50k worth of btc is only 45000 now, then how can you even put 50k?  Unless you turn it into fiat, it seem very complicated.  If this trading was all in fiat, well thats simple.  You add total profit and have a USD balance on the exchange.  But everything is done with btc which makes everything not make sense.

Yes, technically, you are supposed to record the value at the time of sale.  How much did you buy the Lisk for, How much did you sell it for.  The difference is your profit/loss. 

Same for the Bitcoin.  How much did you buy it for, how much did you sell it for.  Again, that is your profit/loss.  It doesn't matter if the bitcoin gains or loses value before or after the time of sale.  It only matters how much you made at the sale.

It really depends per country.

In my country cryptocurrencies fall under property taxes (which is about 1.2% of our property) , so we need to declare that cryptocurrency is part of our property and we also need to declare if their value is above
or below a certain value (we have tax-free property till 25.000 Euro). If we converted the cryptocurrency to EURO, then that value in FIAT will also fall under property taxes.
Our property value is calculated over a set date, which is 1st of january from the previous year.

selfnote : do not convert cryptocurrency to FIAT on the 1st of january .. ever.

In the US at least, selling the bitcoin in order to buy the alt coin is considered a taxable event.

Just like if you sell one stock to buy another stock the sale is taxable too.

I'm not a lawyer, but as far as I know you have to pay income tax. That is, you have to pay tax only when you sell bitcoin or another cryptocurrency to the dollar.

Yes i know you have to pay income tax if you convert the btc into usd.  But what about when you go from bitcoin to say lisk?  And what about when you go back from lisk to btc to secure your profit?  However your profit is not a flat number because that 0.5 btc profit could be 2500 dollars later on or 1800 etc.

I think you would use the transaction value at the date of transaction occurring. Ask at your local tax authority office.

Governments would really like it, but they have no idea how to regulate that, and ever lesser idea on how to force you.

First Of all Your question is Incomplete, But as i was trying to understand according to me and at my current location (USA) we need to pay taxes in the net profit. so if you will sell your altcoin for 1 Btc which you actually bought 3 months ago in 3000$ so you have to keep records of 1 btc total today's value so your net profit  is 1848.3 same way to each and every altcoins and most important you have to keep record everyday and you can report bitcoin price for that day, or week

It all depends on the laws of a specific country. The state determines what kind of activity is subject to taxation and to what extent. Therefore it is necessary to be interested in the legislation of your country. Now, in most countries, the activity with the crypto currency has not been settled yet.

There's always a taxes or transaction fees on every exchange websites because in that way they'll earn money through transaction fees of the traders.
And on USD when you want to cashout it depends on the wallet on your country and what option you will choose Ex. If you want to withdraw using credit card theres a 2% - 10% fee because of credit card fee and depends on what rate they will put on their website.

Only sure thing in life is death and taxes  ::)

You should pay trading fees , and withdrawl fees.

As far as I know in the legislation of many countries is generally not spelled out the value of the cryptocurrency, not something that would be provisions for tax levies. So what you should not worry.

No. You will not pay any taxes when you sell your bitcoins. But you will pay for the withdrawal fees and exchange fees.

No you do not need to pay any taxes if you will sell your altcoin for bitcoin and buy another altcoin but you will pay fee depend what is the rate of the exchange. You will pay fee in every transaction you will make like buying, selling and if you will withdraw.

yes, buy,sell and withdraw all need pay taxes to the exchange, but the fees are different, it depends on the exchange, usually they are very cheap, but some maybe very high campare with others

It all depends on your country's law. Too bad if you're country have this law because you need to abide this whether you like it or not.
Well as for my country, there's no need to pay tax or whatever fees. We can convert btc into fiat like how much we want to convert. We just need to transfer it to our local wallet and choose where we want to get out money.

No, you needn't pay for the taxes.But bittrex will pay the taxes instead, in another word , the taxes are also from all of traders..

Buying and selling your bitcoins have the taxes involved there. Additional fees or charge during your transaction have the competent tax was about 12%. All transactions we make when we buy and sell our bitcoins and altcoin. All banks and money remittances have the big commission on accepting the bitcoin in their transaction. Bitcoin helps the community to get up from disasters or crisis of everyone of us.

You only pay taxes if you're dumb enough to report it.  Stay under the radar, don't make any more than 5 digit USD moves per rolling 30 days.  Use multiple bank accounts, multiple exchanges.  Use your wife, your sister, brother.  Buy visa gift cards.  Buy gold/silver, then sell it.  Taxes are theft.

An amazing amount of misinformation on this thread. I'm answering for the US. I don't know about other countries.

Of course you have to pay taxes on your profits in cryptocurrencies. This is well established.

Whether you have to pay taxes on exchanges of one cryptocurrency for another depends on whether such transactions can be claimed as "like kind" transactions. Whether "like kind" applies to exchanges between cryptocurrencies is controversial. I think that the IRS will eventually rule that these transactions are _not_ like kind and I've read extensively on the issue. Others disagree.

If you choose to treat exchanges between cryptocurrencies as like kind transactions you have to declare them as such on IRS form 8824! Absolutely everyone who trades cryptocurrencies ignores this (except me, of course).

If the IRS rules that these transactions are not like kind, and you have filed form 8824, you are likely to be OK except that you will owe taxes, interest, and possibly penalties. If you haven't filed form 8824 I wouldn't want to be you.

Not a lawyer - just my well researched opinion.

yes u need tax , fee for cash out , if there is no fee for cash out, no profit in exchange ?, and who played exchange in cryptocurrency  .

You need a tax accountant to answer you that question. any answer here is just an opinion based on what they believe or want to be, but no professional basis. Tax law is different for every country, so contact an accountant in yours.

As per my knowledge, it seems does not has any country have rules for manage Bitcoin and cryptocurrency, so taxes Bitcoin or cryptocurrency users is impossible. If the goverment want taxes us, they need have a rules clearly!

You are rite about we need to pay tax but IRS Form 8824 that is not compulsorily we can report taxes and we need to report taxes, IRS recognize Bitcoin and crypto currencies as property so which will come on Capital Gain and loss  which occurs in each and every transaction so if we trade that with any other alt coin and we make some btc than profit btc should converted in USD for that day and calculated tax to report. Each and every transaction profit and loss record should be kept if IRS finds some error they might need that For me that didn't happen yet

Very simple Understanding is If you buy your car in 1200 and sell in 1900 you have to pay Tax for 700 because it is more than 600$, You have to pay each and every capital gain which exceed $600 in a fiscal year.

from what i understand, crypto to crypto is not taxable, if you ever sell for fiat it is taxable as capital gains tax, unless it was at a loss

There are a lot of people here saying that if you don't convert your capital gains to fiat, then you are not liable for taxes on your gains ...  I'm sorry, but that is not true.  Yes, It is easy to hide your gains with Cryptos, but technically, you are required to pay taxes on your trades (or string them together as like kind exchanges), whether you cash out dollars or not.  

Think of it like this.  If I bought a vacant property for $5000 during the real estate crash, then 10 years later traded it for a boat worth $100,000, the IRS would certainly see that as a $95,000 capital gain, even if I never saw any cash from the deal.

Edit:  Again, I'm talking about US law, from my experience as an investor ... I'm not a tax advisor or accountant.

^^ says the obedient slave ^^

Hang on to your principles! I assume you're ok with getting squashed like a bug when the IRS comes looking.

should not be taxable each time exchanging currency values may depend on the government of each country that begins to impose a tax payment in my opinion it is getting better in doing it because it is not considered illegal and can be received well in the future.

They won't come looking, never have.

Bitcoin is considered a legal commodity and not a currency. The rest fall somewhere under the auspice of sub-commodities, related to Bitcoin. So, your taxes should handle this as an investment return profit. It is best to have a professional do this for you, although it is really as simple as one extra page.

JUST FOR US:-
After doing lot of research this is the only correct answer in this thread unless of coarse you want to do tax evasion. I have talked to several lawyers/accountants and they are all of the opinion you cannot apply in kind for Virtual Currency ( though IRS has not clarified anything). If you do apply in kind you have to file 8824 as sp_skeptic mentioned but soon IRS might rule on it. You will pay tax one way or another even if you defer your tax.. Also remember if you have had assets > 10000 on any international exchange you need to file FBAR as well.

If your country is putting taxation to crypto currency or there is a regulation about it then you are obliged to pay taxes. And I think this is what's happening the taxation is just happening after we converted our alt coins and sold it to bitcoin > fiat money. That will be the time when we are going to pay taxes when we are going to consume that money in the things that we are going to buy.

It looks like the site BitcoinTax https://bitcoin.tax/r/2UWQxA7SB  does actually show dollar exchanges when doing a transaction like BTC/LTC. It takes the value of each of those coins at that time to calculate it.

Not sure if it is actually required, or just playing it safe.

Their FAQ is below:
https://bitcoin.tax/faq

When you make transactions online(of any kind: paypal, payeer, bitcoin....) or when you buy/sell altcoins you dont have to pay any taxes to your government. If you cash out real money from selling cryptocurrency , depending on your state you have to pay taxes to your government. There are countries where you dont have to pay any taxes for a limit of money(eg.10.000$) but there are contries where you have to pay taxes even for 100$.
If you want to avoid paying taxes when you cash out real money you can use Payoneer because they have their our debit card so your transactions are not eligible to be seen by anyone,even the government

If you have a real job that can account for moving the amount of money around you're moving, the IRS will never ever ever ever notice or have an inkling to even investigate.  Unless someone narcs on you.  Even then, there's no evidence you made money from crypto.   What people are suggesting in this thread is to pay taxes on all crypto earnings.  This means, if you buy something with bitcoin using bitpay, you're effectively selling your bitcoin for dollars and getting a profit.  Every transaction is taxable.  Who is going to keep tract of this and how are the feds going to know?  Ridiculous!  In 2016, only 802 people told the IRS about their bitcoin earnings.  802 dumb scared slaves.  The only reason I would ever report it is if I was making more than what my job's income could justify.  Taxes are theft anyway.  Taxes are unconstitutional.  If you're a bitcoin millionaire, or better yet billionaire, take that shit to the supreme court and liberate the American people.

yes exactly some online transaction no need to pay tax and it depends on what transaction your doing.

I dont have to pay taxes for my trades. Everything else would the horrible!

There is no tax for any online transaction, but there is a fee for all online transaction including bitcoin, PayPal or any other online transactions. What fee you will pay it will go to the service provider that means which source you will use to send your money to another person, for example, banks or exchanging sites etc. so whenever you can convert your alt to BTC or BTC to alt for each conversion you have to pay conversion fee to the site. If they give you to do free of cost then what is the revenue for them so they will collect a small fee for every conversion.

Every country has its own taxation rules and you have to pay taxes as per your country tax provisions on the profits gain from trading or rise of price of any coin hold by you in your account, when you sell that. No country can tax on your principal amount and only profit after all expenses will be taxed if you show your earnings in your books.

right no tax included and involve just a fee to pay for the transaction they need or want to transac for.

I feel there should be need for further explanation on the IRS form in the sense that for merely selling on an exchange and making profit based on the spirit of fairness in tax should not be taxed because the amount is used to purchased another set of coins but if the sale and profit is being withdrawn, then that is when tax is due.

Taxation is a major earning every government gets, but for the trading needs there is very minimal taxation. Few countries doesn't have taxes and transaction fee or the trading commission charged by the exchange is the one that the traders pay.

Taxes are different by country but at least where I'm at I interpret it as only needing to pay once its cashed to fiat.

This is such a broad question though and I wish there was a website out there showing the exact tax rules by country for crypto trading.

When they can't find out i don't see a problem , btc to fiat you have to pay.

but i dont think its a taxes. its a profit for web host. there might be a taxes for bitcoin we earn when more regulation come up.

Making cashout transaction there will be the time or let say that it can be have a tax and on the case of selling altcoin to btc i dont think that it may now been taxed in cash out i am not totally sure if can be called tax or just a fee.

It only useful when exchanger public their services and want to pay taxes fee. But in the fact, no one wants that, haha. Simply I will ask you: "Would you like to pay the taxes fee when you using cryptocurrecies?"

Even if it is unclear at the moment, the final answer will probably be "no" for most countries. It is only up to the point you cash out to fiat that you will be exposed to tax. Or, even if your bitcoins are taxed, states will soon draw up anti double taxation laws to make it fair and prevent evasion. Australia, for example, is the latest to pass this law. So you're taxed once, and that is it.

Well I think there is no tax when you trade between coins but there are fees in each trade so it totally depends on which trading site you are in and how much are their fees. I haven't also tried on cashing out coins as USD and I'm sure some people have already did that but I do think there is a tax when you cash it out, probably because they its a real currency that you are converting that's why there is tax but in bitcoin or altcoins is not a currency that the government approves yet but soon if the government touches bitcoin and altcoin surely, there will be taxes on it too.

As others are indicating, that depends on your domicile. If you are based in the US I am unfortunately not able to help you further.

When you are trading Bitcoins or digital currencies on an exchange, each sell order must be included in your capital gains calculations, even if you never withdrew the dollars to your own bank account.
If you received USD, another foreign currency, or even another digital currency, you have potential capital gains/losses. This includes any trading to other digital currencies, for example, buying ETH with BTC.

I really don't know cryptocurrencies are getting taxed in most countries.
In my country they don't even follow it. It is not regulated. I guess US citizens are getting taxed?

In my country we dont pay taxes for withdrawing bitcoin's and i think in a most countries still not regulated process, because of complicated and variative methods of withdrawing bitcoin, but i think in couple of countries this process regulated or included as a tax when you withdrawing from card

In the US I would say 100% YES YES YES. Don't mess with uncle sam. That would be the last thing you want to get caught for. An offshore account won't save you!

yes you have a provision regarding selling of crypto currencies and it should be fall under capital gains tax whether short term or long term depending on how long you are holding your capital asset.

No, you do not have to pay tax but you have to pay for the fee. I believe that miner and exchange will take a small fee from your activity. Even retail sellers have some fee too. You do not have to pay tax by using cryptocurrency because they help you to hide your identity. If you want to be a good citizen, you can pay the tax to the government.

There's definitely no problem until the figured out that you have avoided the taxes and trying to arrest you soon. It's better to always report your earning each month to the government.
I prefer to lose 10% of my earning rather than get arrested for years.  By the way, not only btc to fiat which is taxed, but any cryptocurrency to fiat which makes you earn additional earning.

You do not need to pay tax. Well, actually, no one knows and cares about do you pay tax or not because the government, in general, can not trace you because the anonymity that the crytpcourrency has given to us. DOnt worry, just buy coins and hold.s

Everyone just need to answer one question..

ARE YOU TOO RICH TO GO TO PRISON.. ? If not don't do it.. pay your taxes if your taxman is asking.

Lots of other people in this thread have covered this ... But I will just add my two cents:

I would assume, based upon your post, that you live in the United States. In the United States, you are only required to pay taxes on investments (cryptocurrency is considered an investment) when they are "cashed out" ... If you sell your cryptocurrency for fiat (ie. USD) and the value exceeds the "extra income" threshold, it needs to be claimed as "extra income" on your taxes. If you are dealing with values LESS THAN $1,500, I wouldn't worry about it. Also, there is no need to report anything on your taxes when trading one crypto for another -- or if you are holding an "estimated value" worth of cryptos in a virtual wallet. As far as the IRS is concerned, it doesn't exist until it is turned into fiat.

I am not aware of any US based exchanges that refuse to report their statements to the IRS. You can bet your bottom dollar if you sell your cryptos and send $50,000 to your bank account, and don't claim it on your taxes, you will be audited and most likely charged for tax fraud/evasion. Even if they don't catch you immediately, they could very well catch you 2, 3, 4, even 10 years later. You will still be responsible for all those unpaid taxes. If/when you are audited, I guarantee your bank won't be on your side, Coinbase (or whatever exchange you use) won't be on your side -- all of those entities will turn into big giant buses that will continually run you over ;)

Better safe than sorry. If you sell it for fiat, you need to report it (anything over $1500-2000/yr).

does your country accept bitcoin? If they dont accept it and dont do anything to protect your bitcoin why we must pay them tax?

IRS Official Declaration
This Regulation is for US there are different regulation Depending upon your Country
IR-2014-36, March. 25, 2014

WASHINGTON — The Internal Revenue Service today issued a notice providing answers to frequently asked questions (FAQs) on virtual currency, such as bitcoin. These FAQs provide basic information on the U.S. federal tax implications of transactions in, or transactions that use, virtual currency.

In some environments, virtual currency operates like “real” currency -- i.e., the coin and paper money of the United States or of any other country that is designated as legal tender, circulates, and is customarily used and accepted as a medium of exchange in the country of issuance -- but it does not have legal tender status in any jurisdiction.

The notice provides that virtual currency is treated as property for U.S. federal tax purposes.  General tax principles that apply to property transactions apply to transactions using virtual currency.  Among other things, this means that:

Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2, and are subject to federal income tax withholding and payroll taxes.
Payments using virtual currency made to independent contractors and other service providers are taxable and self-employment tax rules generally apply.  Normally, payers must issue Form 1099.
The character of gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in the hands of the taxpayer.
A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property.

More Information
Q-1: How is virtual currency treated for federal tax purposes?
A-1: For federal tax purposes, virtual currency is treated as property. General tax
principles applicable to property transactions apply to transactions using virtual
currency.
Q-2: Is virtual currency treated as currency for purposes of determining whether
a transaction results in foreign currency gain or loss under U.S. federal tax laws?
A-2: No. Under currently applicable law, virtual currency is not treated as currency that
could generate foreign currency gain or loss for U.S. federal tax purposes.
Q-3: Must a taxpayer who receives virtual currency as payment for goods or
services include in computing gross income the fair market value of the virtual
currency?
A-3: Yes. A taxpayer who receives virtual currency as payment for goods or services
must, in computing gross income, include the fair market value of the virtual currency,
3
measured in U.S. dollars, as of the date that the virtual currency was received. See
Publication 525, Taxable and Nontaxable Income, for more information on
miscellaneous income from exchanges involving property or services.
Q-4: What is the basis of virtual currency received as payment for goods or
services in Q&A-3?
A-4: The basis of virtual currency that a taxpayer receives as payment for goods or
services in Q&A-3 is the fair market value of the virtual currency in U.S. dollars as of the
date of receipt. See Publication 551, Basis of Assets, for more information on the
computation of basis when property is received for goods or services.
Q-5: How is the fair market value of virtual currency determined?
A-5: For U.S. tax purposes, transactions using virtual currency must be reported in
U.S. dollars. Therefore, taxpayers will be required to determine the fair market value of
virtual currency in U.S. dollars as of the date of payment or receipt. If a virtual currency
is listed on an exchange and the exchange rate is established by market supply and
demand, the fair market value of the virtual currency is determined by converting the
virtual currency into U.S. dollars (or into another real currency which in turn can be
converted into U.S. dollars) at the exchange rate, in a reasonable manner that is
consistently applied.
Q-6: Does a taxpayer have gain or loss upon an exchange of virtual currency for
other property?
A-6: Yes. If the fair market value of property received in exchange for virtual currency
exceeds the taxpayer’s adjusted basis of the virtual currency, the taxpayer has taxable
gain. The taxpayer has a loss if the fair market value of the property received is less
than the adjusted basis of the virtual currency. See Publication 544, Sales and Other
Dispositions of Assets, for information about the tax treatment of sales and exchanges,
such as whether a loss is deductible.
Q-7: What type of gain or loss does a taxpayer realize on the sale or exchange of
virtual currency?
A-7: The character of the gain or loss generally depends on whether the virtual
currency is a capital asset in the hands of the taxpayer. A taxpayer generally realizes
capital gain or loss on the sale or exchange of virtual currency that is a capital asset in
the hands of the taxpayer. For example, stocks, bonds, and other investment property
are generally capital assets. A taxpayer generally realizes ordinary gain or loss on the
sale or exchange of virtual currency that is not a capital asset in the hands of the
taxpayer. Inventory and other property held mainly for sale to customers in a trade or
4
business are examples of property that is not a capital asset. See Publication 544 for
more information about capital assets and the character of gain or loss.
Q-8: Does a taxpayer who “mines” virtual currency (for example, uses computer
resources to validate Bitcoin transactions and maintain the public Bitcoin
transaction ledger) realize gross income upon receipt of the virtual currency
resulting from those activities?
A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value
of the virtual currency as of the date of receipt is includible in gross income. See
Publication 525, Taxable and Nontaxable Income, for more information on taxable
income.
Q-9: Is an individual who “mines” virtual currency as a trade or business subject
to self-employment tax on the income derived from those activities?
A-9: If a taxpayer’s “mining” of virtual currency constitutes a trade or business, and the
“mining” activity is not undertaken by the taxpayer as an employee, the net earnings
from self-employment (generally, gross income derived from carrying on a trade or
business less allowable deductions) resulting from those activities constitute selfemployment
income and are subject to the self-employment tax. See Chapter 10 of
Publication 334, Tax Guide for Small Business, for more information on selfemployment
tax and Publication 535, Business Expenses, for more information on
determining whether expenses are from a business activity carried on to make a profit.
Q-10: Does virtual currency received by an independent contractor for
performing services constitute self-employment income?
A-10: Yes. Generally, self-employment income includes all gross income derived by
an individual from any trade or business carried on by the individual as other than an
employee. Consequently, the fair market value of virtual currency received for services
performed as an independent contractor, measured in U.S. dollars as of the date of
receipt, constitutes self-employment income and is subject to the self-employment tax.
See FS-2007-18, April 2007, Business or Hobby? Answer Has Implications for
Deductions, for information on determining whether an activity is a business or a hobby.
Q-11: Does virtual currency paid by an employer as remuneration for services
constitute wages for employment tax purposes?
A-11: Yes. Generally, the medium in which remuneration for services is paid is
immaterial to the determination of whether the remuneration constitutes wages for
employment tax purposes. Consequently, the fair market value of virtual currency paid
as wages is subject to federal income tax withholding, Federal Insurance Contributions
5
Act (FICA) tax, and Federal Unemployment Tax Act (FUTA) tax and must be reported
on Form W-2, Wage and Tax Statement. See Publication 15 (Circular E), Employer’s
Tax Guide, for information on the withholding, depositing, reporting, and paying of
employment taxes.
Q-12: Is a payment made using virtual currency subject to information reporting?
A-12: A payment made using virtual currency is subject to information reporting to the
same extent as any other payment made in property. For example, a person who in the
course of a trade or business makes a payment of fixed and determinable income using
virtual currency with a value of $600 or more to a U.S. non-exempt recipient in a taxable
year is required to report the payment to the IRS and to the payee. Examples of
payments of fixed and determinable income include rent, salaries, wages, premiums,
annuities, and compensation.
Q-13: Is a person who in the course of a trade or business makes a payment
using virtual currency worth $600 or more to an independent contractor for
performing services required to file an information return with the IRS?
A-13: Generally, a person who in the course of a trade or business makes a payment
of $600 or more in a taxable year to an independent contractor for the performance of
services is required to report that payment to the IRS and to the payee on Form 1099-
MISC, Miscellaneous Income. Payments of virtual currency required to be reported on
Form 1099-MISC should be reported using the fair market value of the virtual currency
in U.S. dollars as of the date of payment. The payment recipient may have income
even if the recipient does not receive a Form 1099-MISC. See the Instructions to Form
1099-MISC and the General Instructions for Certain Information Returns for more
information. For payments to non-U.S. persons, see Publication 515, Withholding of
Tax on Nonresident Aliens and Foreign Entities.
Q-14: Are payments made using virtual currency subject to backup withholding?
A-14: Payments made using virtual currency are subject to backup withholding to the
same extent as other payments made in property. Therefore, payors making reportable
payments using virtual currency must solicit a taxpayer identification number (TIN) from
the payee. The payor must backup withhold from the payment if a TIN is not obtained
prior to payment or if the payor receives notification from the IRS that backup
withholding is required. See Publication 1281, Backup Withholding for Missing and
Incorrect Name/TINs, for more information.
Q-15: Are there IRS information reporting requirements for a person who settles
payments made in virtual currency on behalf of merchants that accept virtual
currency from their customers?
6
A-15: Yes, if certain requirements are met. In general, a third party that contracts with
a substantial number of unrelated merchants to settle payments between the merchants
and their customers is a third party settlement organization (TPSO). A TPSO is
required to report payments made to a merchant on a Form 1099-K, Payment Card and
Third Party Network Transactions, if, for the calendar year, both (1) the number of
transactions settled for the merchant exceeds 200, and (2) the gross amount of
payments made to the merchant exceeds $20,000. When completing Boxes 1, 3, and
5a-1 on the Form 1099-K, transactions where the TPSO settles payments made with
virtual currency are aggregated with transactions where the TPSO settles payments
made with real currency to determine the total amounts to be reported in those boxes.
When determining whether the transactions are reportable, the value of the virtual
currency is the fair market value of the virtual currency in U.S. dollars on the date of
payment.
See The Third Party Information Reporting Center, http://www.irs.gov/TaxProfessionals/Third-Party-Reporting-Information-Center,
for more information on
reporting transactions on Form 1099-K.
Q-16: Will taxpayers be subject to penalties for having treated a virtual currency
transaction in a manner that is inconsistent with this notice prior to March 25,
2014?
A-16: Taxpayers may be subject to penalties for failure to comply with tax laws. For
example, underpayments attributable to virtual currency transactions may be subject to
penalties, such as accuracy-related penalties under section 6662. In addition, failure to
timely or correctly report virtual currency transactions when required to do so may be
subject to information reporting penalties under section 6721 and 6722. However,
penalty relief may be available to taxpayers and persons required to file an information
return who are able to establish that the underpayment or failure to properly file
information returns is due to reasonable cause.

I am sure i will be charged with transaction fees when selling an alt coin for bitcoins, but not sure if we are still taxed. In my region, we are not yet allowed to use bitcoins. I usually exchange the bitcoins into my fiat and do the basic transactions. These transactions are taxed. So still, some or the other way one is charged with tax. ;)

As far as i know converting a cryptocurrency to another coin will not be charged with any tax since there is still no goverment around the world that has made a law with regards to charging tax on cryptocurrencies.  But whenever you will try to convert your coins into fiat then you will surely be charged with tax,  only if you have done it with legal exchanger though since im sure they are paying taxes to government.

I can't really tell that for sure, but it would make a lot of sense to me, so I guess I would go with that.

no. crypto is decentralised.

On this day, no taxes given to altcoins and bitcoin because until now crypto currency is not connected to the government of each country. Otherwise bitcoin and altcoins to different part of the world is independent so there's no reasons to put taxes our income into crypto currency. However, if in case digital currency will become part of the government, hopefully that our income on crypto currency was not become taxable.

When exchanging coins for bitcoin, only the commission fee paid to miners for the maintenance of transactions is paid. The tax fee is not paid. If the state in the place of your residence establishes a tax charge on profits from the crypto currency, it will have to be paid separately.

If we talking about trading exchanges that we can trade altcoins like buying and selling of altcoins there's a tax or trading fee for every buying transaction i think it's just about 0.01% - 0.1% but if we talk about government getting tax from bitcoin buyers and sellers i think there's not a rules that you need to pay tax on the gov it depends on the exchanges or wallet sites if they will put a tax on every transaction in our wallet website here in my country they didn't getting taxes when you buying bitcoin they'll only getting taxes when you selling your bitcoins and it depends on the remittance center and they'll change the buy and sell rate.

You don't need to pay taxes when you sell an altcoin for bitcoin , you only need to pay the trading fees , for the services of exchanges , you maybe need to pay taxes if you change to fiat money it is depends on your country laws.

Gov doesn't monitor exchanges.  They're not gonna snoop your bank account either.  They'll only know if you tell them.

I hope that also but it is possible because I think for my opinion only government will make it to have tax because they can get a lot of it they will make some study to have it.

intra crypto currency trade what you normally pay is the transaction fee and i dont think that qualify as taxes but if you want to convert from cryptocurrency to fiat currency, lets say bitcoin to dollars, etherum to euro, all any altcoin like Wi coin to waves and then to pound sterling then you will pay taxes just like the Forex bearer does in the inter fiat currency conversion, because it is a currency trade and it needs deductions

This part means that Altcoin to Bitcoin does not need to be reported to taxes, just cryptocurrency to fiat. Is that correct? If this is true, it's going to save me from needing to input hundreds of transactions on my schedule D.

People have said that this is true several times in this thread, but they've never backed it up by quoting anything of substance.

There is no taxes in tx in exchanges but there are some fees that is being deducted with your holdings for the exchange.

I think taxe is only for fiat operations

In fact, our digital coins currency is subject to transaction costs for every transaction, and in my opinion only the data currency should be taxed in accordance with the regulations when it is converted to the official currency.

I would like to fill several thousand 8824 transactions under the section 1031. Since each form 8824 is about 3 pages, it would take me about 10x  - 100x longer to fill out the paperwork than it took me to do transactions themselves. Are there any practical suggestions on how to accomplish this for many transactions/like-kind exchanges? US only.

Yes, to our regret, we have to pay a commission for various services provided, because otherwise nothing will work, neither the exchanges nor other exchange offices, nor transactions, everywhere we pay a small commission for the work of these services

The platform we are using is already paying taxes depends on the country they are operating that is the reason why other platform has a high transaction fee than the other platform. If you convert your cryptocurrency into fiat they will automatically deduct it together with tax depends on the country you are residing. That is why buying and selling bitcoin has a wide gap.

I think yes you should pay your taxes as you transfer it in other currency you made a tax to it and if I pay for something like that I will pay for my taxes that a government requires to a country that you are using and even when you cash it out of has a taxes that you need to like here in my country.

you will have to pay only when you cash out, but there will be commisson charges while buying other alt coins.

There is no yet tax regulation here in our country regarding buying and selling the bitcoin but whenever We change the coins into fiat there is transaction fee with tax included.

I think if the tax affair applies when a country has made its policy and to exchange alt-coins to bitcoin may be charged a fee by exchange as their services

if a country has consented to a crypto and btc transaction then the possibility of an alt-coin exchange to btc shall be taxed as income tax

You will only get taxed when you converted you cryptocurrency to your local currency,trading doesnt require any taxes but you need to pay trading fees in exchanges.

What country is that? 

I think it really depands on the way you are using tol exchange your bitcoin, for me i mostly use peer to peer exchange sites like localbitcoin so if i am using  cash exchage hand to hand i don't pay any taxes the only thing i pay is the transaction fee from my wallet, but i don't find anyone selling bitcoin near me i usally use money transfer method like moneygram or westernunion which uslay takes some fees that are paied as taxes, as for exchanging altcoin for bitcoin i think the best way you can do that is through poloniex which has the lesset fees of all exchange sites.

In most countries you will only be taxed on any USD you take out, quite simply, USD out - USD in = taxable amount, it is a little more complex than that and an accountant can work things out in detail for you but that's the simplified version.

i think the way on how we are able to pay tax are depends on a country that we have to belong for there is a lot of possibility that this is one of the chances that may happen for so better to be more aware for everything tax are can applied everywhere.

If i am getting your question correctly, you are referring to FEE from trading site "exchange"
If i am correct, every transaction happpen within the trading site havee a fee, most of them are 0.1percent of the actual transactions.
But if you are not onto it i cant help you then.

FACT: every time you Deposit a token to the exchange you need to pay for gas.
once you do trade you need to pay the transaction fee on a trade of 0.1 percent.
once you withdraw you token or bitcoin to another wallet you need to pay for transfer fee again.

It depends on your country. Some countries are trying to make money by buying taxes from bitcoins and similar crypto money.
Although there is no support for the investors, the states are earning more than us with this unjust gain

Laws of each country state that every person must pay taxes on the profits received. But many traders do not pay this tax and hide their profits from the state. This is due to the fact that the government can not identify the transactions of the crypto currency.

I think maybe in some other countries they require taxes for the bitcoin users but mostly not. Just like me, my only charge was in transaction fee  only but not in any form of tax deduction mate. Maybe it could have tax once Bitcoin become regulated in each country.

This whole taxing of crypto trading thing is the gov's way of scaring off investors.  They are afraid of the beast.  Well the genie is out of the bottle.  The moral to this story.  Don't sell your crypto cuz USD isn't gonna be worth squat in a few years if not a few weeks.

If you are in the US right now you should report all your sales to the IRS, even between altcoins. It is insane what they want. They need to know your cost basis and if your cost basis was originally xyz token then you need to prove that. Otherwise you could be on the hook for the whole amount, as if your bitcoin appeared out of thin air and had no cost. If you get audited you could end up paying 100% of the sale value.

Keep in mind that the IRS document posted above is the tax guidance in its entirety. There is a ubiquitous assumption that in the US, altcoin for altcoin trading is taxable, but per the relevant IRS guidance:

Q-6:  Does a taxpayer have gain or loss upon an exchange of virtual currency for other property? A-6:  Yes.  If the fair market value of property received in exchange for virtual currency exceeds the taxpayer’s adjusted basis of the virtual currency, the taxpayer has taxable gain.  The taxpayer has a loss if the fair market value of the property received is less than the adjusted basis of the virtual currency.  See Publication 544, Sales and Other Dispositions of Assets, for information about the tax treatment of sales and exchanges, such as whether a loss is deductible.

Notice it clearly only mentions virtual currency being exchanged for "other" property, and "property" in exchange for "virtual currency", never "virtual currency for virtual currency". It is not clear that the IRS intended this to be taxed, and it would lead to situations that have no precedent. Eg, if one buys $1000 worth of altcoin, and then does more altcoin trading for thousands of dollars out of this initial investment, but the altcoins all go to zero (which is quite common), then is there supposed to be a taxable gain? It would not make sense. Out of common sense, it should be a $1000 loss. This only happens in crypto because the volatility is many times higher than all other assets (and the volatility is high because it is purely digital and so easy to exchange). If one believes that these transactions are all taxable, then one must sell holdings before the end of the calendar year to fiat to have the funds to pay taxes, increasing administrative burden, possibly forcing one to sell crypto for a depreciating currency (fiat) and so having a loss, not to mention transaction fees.

I doubt that the IRS has considered any of this or would want for these things to happen. The situation is not the same for stocks, which are tangible companies with employees, assets, real estate, bonds, hopefully profits, and so forth, not digital representations which can be invented en masse in a day. It is clear from the above document that the IRS is not proficient in this space because of the distinguishing of "convertible" digital currency, their definition being one that "that has an equivalent value in real currency", from non-convertible digital currency, but all digital currency has an equivalent value in real currency, just as airline miles and other digital things have a value in real currency. Also, as has been pointed out, the tax on mining bitcoin at the time of mining does not make sense. In manufacturing, when one produces 1000 copies of software, there is no tax until it is sold, it is inventory until that point. So one could again be taxed on mining something that becomes worthless later. When gold is mined, it is generally taxed when it is sold, not at the time of mining.

Like-kind is a total tangent; anyone who has looked at the forms required can tell that it obviously only applies to real estate. So the recent ruling that confirms this obvious fact has no bearing on anything. For example there are tax rules on currencies. If the government comes out and clarifies that a rule only applies to currencies, it would have no bearing on crypto.

The problem is that because the IRS has decreed that virtual currency is to be taxed as property, and property is taxed on form 8949, it would not make sense to not mention altcoin-altcoin trades, because if only reporting fiat trades, the numbers will not add up because the form (which was not designed for crypto) requests the number of items, the date bought, sold, and the cost basis, unless the number of shares of the asset is not reported. The IRS likely did not consider any of this, nor how to deal with hard forks, and so on, so it is normal that the forms would not make sense.

The most obvious solution would be for the IRS to come out with a new form specifically to report crypto trading, which would deal with all of the above issues.

For sure you must pay taxes, but I think nobody is doing that. Maybe some centralised exchanges are adding an extra fee for tax obligations but I am pretty sure that you do not pay taxes by making trades on DEXes.

Till date I haven't come across such a kind of taxation on the trade of any altcoin pairing with bitcoin. There were few countries around the world that has taxed the bitcoin based on the transaction done with cash. Even this can't be followed that effective, to which a trading fee is levied when an altcoin is changed to bitcoin through an exchange  ;)

Well, if you want to be honest with your country , then of course you can show them trading on your account , and from the profits to pay taxes, but for example in my country the payment for the crypto currency is not yet until 2021!

As far as I know, at the moment the cryptocurrency is not taxed, so the answer is negative, you do not need to pay taxes for the cryptocurrency. It is enough to pay taxes for the dollars that you get from the sale of cryptocurrency. ;)

It all depends on the country in which you are located, and what policy this country adheres to in the legislation on cryptocurrency activities.
There are countries in which cryptocurrencies are taxed and those where there is no tax on cryptocurrencies.

You do not need to bother to think of coin sales tax, because it is automatically on the exchanger. Of course, each exchange has a different fee. an average of 0.5% per transaction. And there is an exchanger without fees.

You're right with what you said but this does not work for all countries and in Germany people pay taxes per every successful trade or crypto to fiat transaction while some countries taxnwere pay by the crypto currency exchange. I will advice the OP know how crypto tax are pay in his country.

In my experience on exchanges platforms on where the trading happens there are no actual taxes you need to pay when selling your altcoin for bitcoin but every exchange sites has their own trading fees where in you need to pay a little amount in order to do transactions but some exchange don't have this.

Probably you're asking how do they earn? They are earning through withdrawals if you can notice that whenever you withdraw there's a withdrawal fee you needed to pay in order to withdraw your funds... This is how exchange earn.

To answer your question and conclusion, no there's no tax whenever you sell your altcoin for bitcoin just fees on during exchange (trading) or during withdrawal.

Yes, its the job of the exchange and you can easily see the fees when you withdraw your funds. You are still not subject to income tax, unless you declare it and you have to pay for that. Personally, I’m not paying any taxes aside from the fees and its really good.  :)

What country is this?

It depends on the country, other countries requires you to pay taxes every time you pay and withdraw. But other countries doesnt require you to pay taxes

If there are tax laws then yes you need to pay, some exchanges also keep track of your orders/transactions to make things easier for you.

All i know i that, we won't get charged with tax if we are exchanging between altcoin vs bitcoin vice versa. what we have to pay would be the transaction fee for the miner's reward.

Tax payment is dependent on your country of residence, In my home country government do not regulate CRYPTO transaction, so tax are not collected from transaction emanating  from CRYPTO, I only pay tax when my banking transaction exceed 10,000, 000. For government to collect tax it has to be only when you convert your Altcoin to fiat.

If it's direct transaction from altcoin to bitcoin with no any fiat in the middle or any bank transaction, you won't need to pay for taxes because they can't track that.

Paying taxes are such a pain. Too much money is being drained from me that I dont really understand why they take so much

It should not be that simple. As far as I know, if there is earnings, the tax have to be paid. The rules should be thoroughly researched on google, then should make decision.

maybe for now only a few countries are applying to pay taxes or maybe there is no such country.
but from what I hear, crypto owners will be taxed every year such as vehicles and homes.
I have not confirmed whether it is banar or not. maybe someone will explain later to you.

Of course, every trader who makes a successful buy/sell order pays tax indirectly. Exchanges are taxed by the governments and users of these exchanges are charged trading fees. Also, the final conversion of crypto to fiat comes with the payment of tax indirectly as these registered crypto merchants are taxed by the governments.

It is a good idea when we buy and sell bitcoin without paying taxes, in my country there is no need to pay taxes when buying or selling bitcoin because my country prohibits bitcoin and we have a place (website) to buy and sell Bitcoin like you say

Taxation of cryptos is a  new and complex area that will vary for different countries. Even most of the CPAs do not know how to go about handling crypto taxes.

in my opinion you only have to pay taxes from the USD that you cash out, because if you only trading altcoin and bitcoin, in my opinion it hasn't given you income yet, so you don't need to pay taxes if you haven't cash out to USD.

No you don't pay taxes to any government but the exchange do take a fees for helping you to carry out the exchange. That fees would be the operating profit of the exchange and the exchange itself don't pay tax for it. But in some cases, you are likely to pay taxes when you are withdrawing your crypto into fiat.

It could be possible that a portion of the fees you paid when you did the buying and selling will go to the taxes that are paid by the exchange platform. That is, if the platform itself is duly registered in the country it is operating. You might not be paying taxes directly, only indirectly. If you cash out, it is basically the same rules. Very seldom, if at all, will you encounter directly paying taxes every time you do cash outs. That would probably be shouldered by the company using the fees you are paying.

If what you meant by taxes is the tax that you pay to a government, I don't think you pay any tax if you just buy/sell alt-to-btc or btc-to-alt you might need to pay taxes if you buy/sell bitcoin to Fiat money, but it also only occur in some exchange.
However, you still need to pay the exchange fees if you buy/sell alt to bitcoin. Most of exchange have fees, only small number of exchange does not have exchange fee, only withdrawal fee.

As far as I know, when converting from one cryptocurrency to another, taxes are not levied. As a rule, taxes are levied at the termination of cryptocurrency in fiat. Yes, and the sale of one cryptocurrency and the purchase of another is very difficult to track. In addition, it is necessary to take into account that taxation is applied when people earn a certain profit. Selling one cryptocurrency and buying another does not give us profit yet and there is no point in taxing such operations. However, each of us needs to follow the legislation of our country and know it well.

I don't pay pax when I sell my alt for Bitcoin but rather a transaction fee to the exchange  which the amount varies depending on the exchange platform through which you are selling or even  buying

Why pay taxes to the government while the country is banned crypto? Of course this is a funny thing, if the country expects tax from crypto activity then the first thing to do is to legalize crypto immediately.

the exchange fee is precisely if the tax might be that the government cannot yet issue taxes from crypto currency transactions because the government in my country still prohibits crypto currency for transactions and the government cannot provide tax on the crypto currency itself

I do not pay anything. I do not see much point in this. As long as the government does not normally arrange everything, I'm not going to pay anything. Of course, except for the commission which is on the platform where the exchange takes place.

As far as I know and what I have been experiencing is that you can exchange your tokens with anyone. But for that, you need to pay certain amount for trading. And in another case, when you transfer your coins to another exchange, you also need to pay some certain fees. And when you sell coins and withdraw fiat money, you have to pay tax the government has fixed.

I think it depends majorly on your county law and the ways by which u actually trade it for fiat currency.. I have trusted individuals I sell to so I seldom use exchangers nor get to pay taxes..

Dont think so
Crypto to crypto transaction is not taxable but crypto to fiat is if not mistaken
But it really depends on your country tho
Anyhow Crypto taxing has different rules and regulations in different continent

You always pay. Remember this phrase, you always really overpay. As soon as you bring your funds to the exchange, you pay for the input and withdrawal, but the exchange only pays for the withdrawal.

Actually you can send this money to your card and no one will ask where they come from you , I did so and everything went well , but if you want to pay taxes then pay

Basically, the tax has already applied to the exchange site but if there will be a tax for income and it will be a different thing that totally depends on the regulation that already applied in any country. It will need a lot of time to discuss.

That includes tax. relaxation fee and withdrawal of course it will also be included in the tax from the exchange company, without us knowing that bitcoin has been taxed without doing anything else complicated.

it all depends on the exchange you are using and not on the country. each exchange has its own rules on the introduction of a commission or its cancellation

In my country there are no clear rules about cryptocurrencies so there is no obligation to pay taxes, actually I hope the government immediately legalizes crypto so that it can provide additional income for the country.

I agree with this, from reviewing all the published information. It is unrealized as you point out.

When an altcoin is traded for bitcoin there will be a trading fee for that, apart from this I don't find any fee being levied on the respective trade. Countries have regulated the use of cryptocurrency as well have levied taxes, and these taxes were levied upon the transaction done from bitcoin to fiat. This too isn that effective, and these are the factors that make governments oppose cryptocurrency as it is hard to tax them.

I think a lot of people are yet to realise that the exchange they trade on, most especially centralized exchange, pays tax. So for such exchange to be able to meet up with their charges by the government, they would have to put some of the charges on their customers, which is taken from both trading and withdrawal fees. I am not surprised to see some exchanges charge exorbitant fees.

It depends on your country, in my country digital assets are not really recognised as something that even exists so taxes are not charged for them no matter the amount of profit you make, they wouldn't even know how to track it to begin with.

wow there are so many idiots on here and most of you got it so much wrong.  Please do your research. A simple google search instead of asking for advice  from the ignorant, anarchist and tax evaders of bitcointalk.

https://www.cryptotrader.tax/blog/how-to-handle-your-bitcoin-and-crypto-losses-for-tax-purposes

By united states IRS tax laws, An alt coin to bitcoin trade is a taxable realized event.  Regardless if you put the money in the bank or not.

Like kind rules do not apply anymore. IRS in the united states made it clear.

Pay your taxes you owe or face severe tax penalties. Some people had to pay for over 50k in penalties  for avoiding paying their taxes, things will get messy and you will have to hire a tax lawyer.


Yes they can easily track you.  btc and eth and many other crypto currencies have transparent blockchains and your information is recorded as permanent record.  A central exchange like coinbase, binance, etc  would have to hand over your records if the IRS suspects you of avoiding paying taxes and wants to really crack down.

Most countries will follow united states tax laws so please do your research on your specific country.

According to what? There is no official IRS guidance that states that an altcoin to bitcoin trade is a realized event. Because random people posted their opinions on sites indexed by google does not mean it is so. And if you look at the official IRS guidance, it only mentions selling crypto for USD, and exchanging crypto for real assets (like a coffee), which ARE both taxable.

When stocks are sold, they are sold for USD, and then the proceeds are used to buy another stock. It is not comparable to a crypto-crypto trade. And stocks have real assets like land, buildings, equipment, intellectual property, employees, and so on, none of which exists in an altcoin. Tax professionals have no understanding of crypto. Many will admit that they cannot provide guidance. Others with no experience/understanding of crypto think an altcoin is like a share of a stock. So they can give advice which is wrong.

Like-kind has nothing to do with anything. It's for people exchanging land or property, or similar things. I cannot claim like-kind for stocks. If I was discussing stocks and brought up like-kind, it would mean nothing, just like like-kind for crypto means nothing.

This is incorrect, tax laws vary widely from country to country and most countries do not follow united states tax laws. In fact, the United States is one of 2 countries in the world that taxes based on citizenship (instead of residency or other statuses).

How do I think that while this area is not fully legalized, then taxes are out of the question as to what to pay for? In fact, cryptocurrency is not recognized as a valuable asset, so it is invaluable by the law.

Are you really this stupid or have been living under a rock.  !?
Please do not spread false information as you will get others in trouble with false reporting. !!!

Here is the tax documentation guidelines from coinbase and the IRS. 

https://www.coinbase.com/bitcoin-taxes#doyouowe

What's taxable
I.e. “converting” one crypto into another. Using bitcoin to buy ethereum is considered a disposition of the bitcoin, for example

https://www.irs.gov/pub/irs-drop/n-14-21.pdf

"Q-6: Does a taxpayer have gain or loss upon an exchange of virtual currency for
other property?
A-6: Yes. If the fair market value of property received in exchange for virtual currency
exceeds the taxpayer’s adjusted basis of the virtual currency, the taxpayer has taxable
gain. The taxpayer has a loss if the fair market value of the property received is less
than the adjusted basis of the virtual currency. See Publication 544, Sales and Other
Dispositions of Assets, for information about the tax treatment of sales and exchanges,
such as whether a loss is deductible. "

There are the exchange taxes so if you converted any altcoin in bitcoin i believe you paid the tax. If we talk about governmental tax, if it is not converted in fiat coins then you don;t have to.

I find out that recently, that we really need to pay taxes, if we exchange altcoin to altcoin or Bitcoin. This doesn´t make any sense.
I do not understand how I should pay taxes for exchanging Bitcoin into altcoin? In altcoin? Or I need to sell 20% of my Bitcoins to pay taxes??? If I exchange EUR to USD I do not have to pay!  ::) :(

True, If you exchange any of your coins into usd  or into money you should pay taxes but if its bitcoin to altcoins or any coins I don't think you will pay taxes.

FALSE!

Here's proof and why are so many people on here ignoring the laws. ??


Here is the tax documentation guidelines from coinbase and the IRS.  

https://www.coinbase.com/bitcoin-taxes#doyouowe

What's taxable
I.e. “converting” one crypto into another. Using bitcoin to buy ethereum is considered a disposition of the bitcoin, for example

https://www.irs.gov/pub/irs-drop/n-14-21.pdf

"Q-6: Does a taxpayer have gain or loss upon an exchange of virtual currency for
other property?
A-6: Yes. If the fair market value of property received in exchange for virtual currency
exceeds the taxpayer’s adjusted basis of the virtual currency, the taxpayer has taxable
gain. The taxpayer has a loss if the fair market value of the property received is less
than the adjusted basis of the virtual currency. See Publication 544, Sales and Other
Dispositions of Assets, for information about the tax treatment of sales and exchanges,
such as whether a loss is deductible. "

False again!

You do pay taxes for currency exchange trading if their was any gains or losses.  This is called Forex trading!!

Geeze you guys are total newbs.  

Yes you will need to sell something to fiat to cover your taxes b/c irs wants fiat.  So yes that means you will probably need to sell your bitcoins if your broke in fiat and you will get taxed on that sell also.  So if your an early adopter and bought btc at pretty cheap value you will pay a lot of taxes.

If you bought btc at a high value you actually may not have to pay for anything since you realized a loss and that can offset any income gains. Just do your accounting correctly as best as you can.

I bolded the relevant part of your post. It says very clearly "property" for "virtual currency", not "virtual currency" for "virtual currency". Look at question 6 itself: I am quoting your quotation:

"Q-6: Does a taxpayer have gain or loss upon an exchange of virtual currency for
other property?

The question specifically asks about virtual currency in exchange for other property!!

Why doesn't coinbase have any citations? As I said before, tax professionals who do not understand crypto think that crypto is like a stock. In addition, any tax professional wants to be sure that they give the advice that will result in the highest taxation, because they do not want to have any liability to their customers in case the lack of IRS guidance means higher taxes are due. If you were at Coinbase, would you do it any differently? Coinbase happened to be the one that got in trouble with the IRS because no one there was paying their taxes! I'm assuming that Coinbase was not issuing any tax forms to people for years, and now is trying to catch up.

Actually there is a limit for small transactions, so if someone buys a coffee with euros that are transferred to USD that falls below the limit, it is not taxable. But for crypto exchanges for property, including a coffee, it IS taxable.

Why do you keep lying to yourself and make excuses.  Best to stay compliant with the law and pay your taxes or your asking for an irs audit and yes they are like the mafia they will fine you till your bankrupt. No joke.
Under IRS guidelines crypto is treated as property.
All the cryto tax software will calculate taxable events for alt coin to bitcoin trades and even alt coin to alt coin trades.
Yes crypto is taxed exactly like stocks weather you like it or not.
Coinbase issuing tax forums is very hard to do accurately since people can easily send their funds to other exchanges and send it back to coinbase and therefore is not a reliable way to calculate your taxes you owe.

If people listen to your advice they will be in big trouble down the line and you will not be their to save them and neither yourself.  Do your best and pay your taxes and try to stay compliant with the irs laws and stay out of trouble.  Best of luck to you.

I think the issue of tax depends on your locality country and their rules
But naturally I count the exchange platform fees as a form a tax payment

And if you use changelly and similar sites to buy bitcoin with fiat; you probably have to pay extra charges

In the united states you can deduct your fees the exchange charges you.  However this is not a form of tax payment. It just slightly lowers your avg cost basis.

Exchange platform fees is not a form of tax payment.  I don't care where you live. That's does not make any sense and no government or irs would let you get off that easy.

When you make an exchange between bitcoin and altcoins you dont need to pay any taxes at all to the government because everything is completed within the exchange and it does involve real fiat. When you cash out your bitcoin or altcoins earning into USD or other currency you do have to pay different taxes depend g on the country you are living in

about paying taxes from cryptocurrency, I think this depends on each country. each country has a different policy / regulation about cryptocurrency, so to find out if you have to pay taxes, and how much, you have to find out the regulations in your area.

for the mean time we are thinking of these tax as the transaction fees like everyone is saying, but believing or not, it is just a matter of difference in order to compare it to real taxes. Yet, we clearly understand where this taxes in crypto goes. For processing and managing millions of transaction every moment. I can say, yes it is comparable for you to pay taxes while making transaction.