How to pay your US taxes on your Bitcoins/Gains?

[BTC Turkiye]

If I keep day trading $100k and I make a $1000 a day off of it.

1- Do I pay taxes on the $100k? or just the $1000 a day I make?
2- Will I pay income taxes on it or capital gains taxes?
3- Would I pay less taxes if I become a company? compared to be an individual?
4- What type of company I should become?

I`d greatly appreciated it if someone can give me some detailed information about this. Also let`s not forget to attached the IRS form


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

[codewench]

If I keep day trading $100k and I make a $1000 a day off of it.

1- Do I pay taxes on the $100k? or just the $1000 a day I make?

The $1000. Times 365 if you made that much each day.

2- Will I pay income taxes on it or capital gains taxes?

Capital gains. If you are day trading, then presumably it will be short term capital gains which will be taxed at the same rate as wages.

[BTC Turkiye]

Thank you. So I won`t be claiming or saying anything about the $100k at all? or are they going to ask me any questions about it?

[codewench]

Thank you. So I won`t be claiming or saying anything about the $100k at all? or are they going to ask me any questions about it?

On From 8949 you'll report something like this:

xxx BTC; acquired Jan 1; sold Jan 2; proceeds $101,000; basis $100,000; gain $1,000
yyy ETH; acquired Jan 2; sold Jan 3; proceeds $103,000; basis $101,000; gain $2,000
zzz BCC; acquired Jan 3; sold Jan 4; proceeds $102,000; basis $103,000; gain -$1,000
...
Totals: proceeds $36,865,000; basis $36,500,000; gain $365,000

[webtricks]

If I keep day trading $100k and I make a $1000 a day off of it.

1- Do I pay taxes on the $100k? or just the $1000 a day I make?
2- Will I pay income taxes on it or capital gains taxes?
3- Would I pay less taxes if I become a company? compared to be an individual?
4- What type of company I should become?

I`d greatly appreciated it if someone can give me some detailed information about this. Also let`s not forget to attached the IRS form


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

1. case(a) You will pay tax on $1000 * 365 = $365K if you invested $100K from already taxed sources. For example: BTC or other cryptos bought from bank deposits. case(b) But if you used $100K earned from online sources, etc (which aren't taxed already) then you need to pay tax on $365K+$100K = $465K.

2. From point 1. above, if case(a) implies you need to pay tax percentage according to Capital Gains limits. Whereas if case(b) implies, you need to pay income tax on whole $465K, they won't be considered as Capital Gains.

3. Nope. It won't matter unless you running crypto based business but even in that case your tax will be more than individual.

4. You shouldn't.

[fiulpro]

Taxes are what you make with respect to the amount you earned.. thus you will have to pay tax according to..the money you made not according to what you invested in .

Now , even if you become or establish a company still the taxes will remain same if not .. increase .

And what kind of question is that ? What kind of company I should open ?

It solely depends upon you, what you are comfortable in and what raw materials you have.,.for a company you do need a lot more than money .. thus research a little and ..use Google and everything​else too..see what you can handle correctly

[Hydrogen]

If I keep day trading $100k and I make a $1000 a day off of it.

1- Do I pay taxes on the $100k? or just the $1000 a day I make?
2- Will I pay income taxes on it or capital gains taxes?
3- Would I pay less taxes if I become a company? compared to be an individual?
4- What type of company I should become?

I`d greatly appreciated it if someone can give me some detailed information about this. Also let`s not forget to attached the IRS form

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

....

I think... capital gains tax would not apply, unless you exchange crypto for fiat. The way capital gains taxes work with stocks is, the tax is only paid when the stock is sold and exchanged for fiat currency. Capital gains may be designed to promote long term HODL, rather than short term speculative day trading. Over the long term, this promotes greater market stability, which is an interesting view when applied to crypto's current markets which have become increasingly volatile with the introduction of crypto futures.

The income tax would apply to gross income(without including appreciation of assets which do not fall under capital gains & similar taxes). Your $1,000 per day would fall under the income tax column.

[MairaObergh]

I think it all depends on how much money you cashed out during the year. You don't have to pay on the Bitcoins you made, unless you cash out.

[ItsEzMkay]

I think it all depends on how much money you cashed out during the year. You don't have to pay on the Bitcoins you made, unless you cash out.

You would think that accept right now in the USA they are trying to change that to....https://news.bitcoin.com/proposed-u-s-legislation-may-criminalize-those-who-conceal-bitcoin/

[Qartersa]

Interesting topic to see that someone really is interested in paying their taxes to the government, even though you know that the government would not even know off your income or even the amount you are trading with. Though be prepared, as the US government has really been aggressively against cryptocurrency and their traders. There are a lot of news that crypto users has been jailed in the US for not paying taxes. They might find a way to turn the tables and show that you had unpaid taxes. I would personally go to an accountant first about this.

[SupportBitcoin]

Capital gains would apply. So, based on your calculations you would have earned $365,000 for the year. It would be taxable as wages are. You only want to make yourself into a company if that helps your tax bracket and causes you to pay less tax. I'm not as well versed on how the new tax plan is with Donald Trump, but you may get some tax advantages under his plan if you become a company. I would research it to see how it will affect you when it goes into law.