Tax issues when I bought a BTC from United States, and sold to another countries

[David Lee]

Hi Guys.

I live in the united states but my citizenship is South Korea.
I've bought some BTC from Gdax, and found that the price in a Korean exchange market is really much higher.
So I've just sold it to the market in Korea, which doesn't impose a tax, and got some arbitrage profit.
After that, I transferred the profit from South Korea to the states and sold it again.

In such case, I'm not sure how to report to IRS. Also, I happened to notice that it could be regarded as "money laundering" but I'd like to ask your thought.

Please share your thought!

[1714871541]

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[David Lee]

Some said that as long as I pay the taxes for the amount of (arbitrage) profit that I earned in South Korea, it should be "okay", but not sure.

[audaciousbeing]

Hi Guys.

I live in the united states but my citizenship is South Korea.
I've bought some BTC from Gdax, and found that the price in a Korean exchange market is really much higher.
So I've just sold it to the market in Korea, which doesn't impose a tax, and got some arbitrage profit.
After that, I transferred the profit from South Korea to the states and sold it again.

In such case, I'm not sure how to report to IRS. Also, I happened to notice that it could be regarded as "money laundering" but I'd like to ask your thought.

Please share your thought!

From the way I understand tax laws, you will have to report to the IRS and how to go about is normal about when you sell in the United States because that is the way its going to be interpreted you residence. Regarded as money laundering is to the extreme people that launder money won't bother to do the right thing like you wanted to do. All you did was identifying a market abroad that would give you a more decent return I haven't read any law against that but be sure to pay the tax on the entire income not on the amount you would have sold if you made it in the United States.

With that, I expect that everything should go the right way, there is nothing wrong in getting money from abroad just be sure you have an explanation for it and since tax arises, then that area has been covered.

[smartmey]

Hi Guys.

I live in the united states but my citizenship is South Korea.
I've bought some BTC from Gdax, and found that the price in a Korean exchange market is really much higher.
So I've just sold it to the market in Korea, which doesn't impose a tax, and got some arbitrage profit.
After that, I transferred the profit from South Korea to the states and sold it again.

In such case, I'm not sure how to report to IRS. Also, I happened to notice that it could be regarded as "money laundering" but I'd like to ask your thought.

Please share your thought!

if the news I hear from social media, depending on his country, because there are some countries that legal btc and some are not or free

[darkangel11]

I'm not sure how the US law sees it, but you're not supposed to pay taxes twice. In the EU we can choose the country ourselves. Years ago when you were a citizen of one country and got a job in another you were supposed to report income to the country you came from but now you can choose and file the report wherever you like. Obviously people are choosing the country with lower rates
Usually when you're living and working in a country you're supposed to file reports there, regardless of your citizenship. If I were you I'd file in the US.

[thomasjonestaxman]

As an Enrolled Agent working for a CPA firm, here's a couple different things to keep in mind:

1) If at any time you hold financial assets (cash, investments, securities) with a value greater than $10,000 at any time during the year then you're required to file a FBAR by April 15 of the following year.  We normally prepare this with the tax return, since they kind of go hand-in-hand and have the same due date.  If the amount is greater than $75,000 at any time or greater than $50,000 at the end of the year, you also need to include Form 8938.  If any non-US person gifts you money, crypto, an investment, or anything with a value of greater than $100,000 you need to file Form 3520.  I could go on, but from what you shared there's definitely a foreign reporting requirement.  Just know that accidentally not filing a FBAR has huge penalties.  Intentionally not filing a FBAR is criminal and can lead to jail time.  So definitely not something to be taken lightly.

2) As a US citizen, you have to report your worldwide income, including what you make in Korea and what you earn or gain in coin.  That said, there's a number of provisions in place to limit or avoid being double-taxed by both Korea and the US, including the Foreign Earned Income Exclusion, Foreign Tax Credit, Foreign Housing Exclusion, and specific tax treaty provisions.  So make sure you work with a CPA or Enrolled Agent with experience in foreign reporting and cryptocurrency to properly report your income.

3) Proactive tax planning can help ensure you are taking advantage of the best strategy to minimize your taxes.  There's so many tax planning strategies from entities, retirement plans, to cost basis allocation, and time spent outside the US to make sure you're minimizing what you're supposed to pay in tax.

[David Lee]

First of all, thank you so much for your detailed answer to my post. I really appreciate it.
what's the best way to reach you to discuss?
(I was trying to send you a message, but i'm quite newbie, so can't send it to you)