My query is about paying taxes on daily interest earned from lending coins like Lendconnect and Regal coin. The only thread I found out on  the net involved Bitconnect and the best answer seemed to be to report your interest income on  IRS schedule B (for the United States). Ironically, the thread ended with a post asking what to do if Bitconnect shut down and ran off with all the money.

I won't report these "earnings"  as interest income to the IRS because all I have is a page on some web site from some anonymous techie people that my $1000 has earned 3 gazillion dollars in interest. The lending platform is not a licensed financial institution nor will it be sending 1099 forms to the IRS. So how can I be expected to pay thousands of dollars for interest supposedly earned on puke coin or whatever platform it is? It's impossible to say these platforms are not scams or that they won't be gone tomorrow... with everyone's BTC.

It said in the thread that I mentioned that at least one CPA said you should pay tax on the interest when you convert the interest earned to USD. I can't see any alternative to this because I won't know if I've truly earned the interest until it's in my hand. Just because Joe Blow with a website says I've earned thousands in interest shouldn't make me liable for taxes.

I have no problem with paying taxes. My problem is paying taxes on phantom income.

Can anyone add any clarity to this topic?

I'd have to disagree with you...unless you have some more specifics to add. I've been at this for about a month and I have created, from a taxation perspective, a labyrinthian maze of transactions using Coinbase, Binance and Shapeshift which will, as far as I can tell, make if close to impossible to determine what my cost basis is for the amount of coin that I convert back into fiat currency.

After pondering this for a while, it seems that trying to keep track of this like you would with individual stocks is out of the question. I'm also thinking that people may lose track of the sometimes (not all the time) God-awful fees we pay for simply moving currency from one site to another which will add to the cost basis of our holdings. And isn't it true to say that there is no record of currency conversions done at Shapeshift because you have no account there?

My point is...if you cash in 100 altcoins, how can you determine your cost basis after all the gyrations we have to do with our coins - especially coins other than what I call the big 3: BTC, ETH, LTC.

I will continue to research this and ponder it but if anyone has any specifics on this I'd love to hear. Maybe by the time we cash out, we'll have so much money we'll simply hire an accountant to take care of this.

On a somewhat unrelated topic...I was going to join eToro to do copy-investing (copying the trades of proven investors) but the reality is that I would be entering into literally thousands of forex contracts over the year all of which, I assume, the IRS would want individually reported on your tax return.