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Author Topic: Taxes - Gift, Inheritance or Buying  (Read 68 times)
BTC Turkiye
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January 14, 2018, 12:29:15 AM
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How should I claim my initial coins to start day trading?
Should I claim them as they were gift from someone? or inherited from someone? or Should I just claim that I bought them expensive?


None of those claims will have any kind of proof because I actually got the coins in 2013 from exchanges that are closed now and were overseas. So please help?

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ProofOfLambo
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January 14, 2018, 12:57:57 AM
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In my country people are by default innocent, but I am not so sure about who has to proof the case in the case of money. Some people would buy a lottery ticket with a price for more money that the price and then say they won it gambling. It is an expensive solution however.
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January 14, 2018, 07:22:03 AM
 #3

How should I claim my initial coins to start day trading?
Should I claim them as they were gift from someone? or inherited from someone? or Should I just claim that I bought them expensive?


None of those claims will have any kind of proof because I actually got the coins in 2013 from exchanges that are closed now and were overseas. So please help?

I remember that you asked the same question in another forum thread.Why are you asking this multiple times?
Where are you from and are you familiar with the taxation legislation in your country?
I guess that you want to avoid capital gains taxation.If i had to shoose between the three options,i will choose the third one.The first two-gift and inheritance seem not so realistic to me.People just don`t send their crypto as gifts and they don`t inherit crypto. 

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January 14, 2018, 09:35:16 AM
 #4

How should I claim my initial coins to start day trading?
Should I claim them as they were gift from someone? or inherited from someone? or Should I just claim that I bought them expensive?


None of those claims will have any kind of proof because I actually got the coins in 2013 from exchanges that are closed now and were overseas. So please help?

How did you get coins from exchanges which are closed now? Please clear this line with more info, I could help you better then.

I guess that you want to avoid capital gains taxation.If i had to shoose between the three options,i will choose the third one.The first two-gift and inheritance seem not so realistic to me.People just don`t send their crypto as gifts and they don`t inherit crypto. 

In order to show any amount as Capital Gains, it is required to show the invested amount first on which either gain or loss has been made. That amount must be in fiat of respective country. For example, if your balance is $15000 in trading, you can't simply state that $15K is amount after Capital Loss on $20K invested but you have to show receipt of purchase of crypto worth $20K from fiat at the time of entering trade.
BTC Turkiye
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January 14, 2018, 10:36:44 AM
 #5

How should I claim my initial coins to start day trading?
Should I claim them as they were gift from someone? or inherited from someone? or Should I just claim that I bought them expensive?


None of those claims will have any kind of proof because I actually got the coins in 2013 from exchanges that are closed now and were overseas. So please help?

I remember that you asked the same question in another forum thread.Why are you asking this multiple times?
Where are you from and are you familiar with the taxation legislation in your country?
I guess that you want to avoid capital gains taxation.If i had to shoose between the three options,i will choose the third one.The first two-gift and inheritance seem not so realistic to me.People just don`t send their crypto as gifts and they don`t inherit crypto. 

Yes I have asked a similar question before but I realized I had to simplify it and change it a bit to get more answers from people because this is very important for me

Quote
How did you get coins from exchanges which are closed now? Please clear this line with more info, I could help you better then.

Ummm, just like how people bought coins from MtGox before or BTC-e. There has been so many exchanges that served well but them then they shut down for various reasons. There`s no way to get the proof of your purchase from those companies anymore

Quote
In order to show any amount as Capital Gains, it is required to show the invested amount first on which either gain or loss has been made. That amount must be in fiat of respective country. For example, if your balance is $15000 in trading, you can't simply state that $15K is amount after Capital Loss on $20K invested but you have to show receipt of purchase of crypto worth $20K from fiat at the time of entering trade.

I totally understand and this is the problem though. I can claim the amount I bought it for but I can`t prove it. There is no way to prove it just like if you bought it from an individual or you mined it in 2011-2013 or so. I mean in some cases you just can`t prove it and my question is what what if you can`t prove it and they can`t prove the otherwise, what`s going to happen?

Also just to clarify, I`m talking about US taxes and I`d like to tell them that I bought it at a high price this year in a shut down exchange that will give me no proof of purchase.

What do you say?


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January 14, 2018, 04:41:25 PM
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Quote
How did you get coins from exchanges which are closed now? Please clear this line with more info, I could help you better then.

Ummm, just like how people bought coins from MtGox before or BTC-e. There has been so many exchanges that served well but them then they shut down for various reasons. There`s no way to get the proof of your purchase from those companies anymore

Quote
In order to show any amount as Capital Gains, it is required to show the invested amount first on which either gain or loss has been made. That amount must be in fiat of respective country. For example, if your balance is $15000 in trading, you can't simply state that $15K is amount after Capital Loss on $20K invested but you have to show receipt of purchase of crypto worth $20K from fiat at the time of entering trade.

I totally understand and this is the problem though. I can claim the amount I bought it for but I can`t prove it. There is no way to prove it just like if you bought it from an individual or you mined it in 2011-2013 or so. I mean in some cases you just can`t prove it and my question is what what if you can`t prove it and they can`t prove the otherwise, what`s going to happen?

Also just to clarify, I`m talking about US taxes and I`d like to tell them that I bought it at a high price this year in a shut down exchange that will give me no proof of purchase.

What do you say?


Ok next question I would like to ask that you are looking how to tax your amount or how to evade tax?

Regarding taxation, if you can't verify input amount with adequate proofs, whole final amount will be consider as your income. So you have to pay income tax on whole amount according to US tax slabs of 10%, 15%, 25%, 28%, 33%, 35%, or 39.6%.

Regarding evasion, I can't suggest you any viable mean. You have to co-meet local accountant and blockchain advisor to reach adequate measure.
BTC Turkiye
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January 14, 2018, 11:05:56 PM
 #7

To answer your question; I`m trying to maximize my tax returns.

Since there is no way to prove how I got that amount then I`ll have to claim something and expect them to believe since they can`t prove otherwise either.

Then my question to you would be, what if I bought this amount from an individual that I found on localbitcoins.com and have no connection him anymore? They can`t just assume the whole amount is taxable and think the whole amount is a gain. That`s so unfair

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January 15, 2018, 01:10:27 AM
 #8

If you don't have any proof, you're going to have to state that you bought these coins at $0 on tax documents and then sold them at their current price (whenever you go ahead and sell them) So you're going to have to pay capital gains on the whole 15k or so, which is going to be a massive amount of capital gains to pay. I would try to look LONG and HARD to try to find some receipts so you're not paying that much money, as I doubt you made enough money to justify that.

Buying at 0
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January 15, 2018, 01:35:45 AM
 #9

How did you pay for them? In most places you can get banking records going back a few years. If you paid with a card or bank transfer it should show up. Other than that you'll probably need to assume a 0 cost basis for the sake of a quiet life, especially with the IRS.

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January 15, 2018, 01:45:02 AM
 #10

How should I claim my initial coins to start day trading?
Should I claim them as they were gift from someone? or inherited from someone? or Should I just claim that I bought them expensive?


None of those claims will have any kind of proof because I actually got the coins in 2013 from exchanges that are closed now and were overseas. So please help?
IMO none of this options looks good. If it is a gift then tax department will ask you to point on the person that made that gift (also for example in my country you should pay taxes from the gifts that worth over 1k USD). If you claim that you've inherited those coins then you will be asked to bring some legal documents that will prove your words and you still gona have a rist of getting taxed.
If  you have a lot of coins then the cheapest option is just to fund a country with soft taxation and move there.

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January 15, 2018, 05:48:21 AM
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I totally understand and this is the problem though. I can claim the amount I bought it for but I can`t prove it. There is no way to prove it just like if you bought it from an individual or you mined it in 2011-2013 or so. I mean in some cases you just can`t prove it and my question is what what if you can`t prove it and they can`t prove the otherwise, what`s going to happen?

Also just to clarify, I`m talking about US taxes and I`d like to tell them that I bought it at a high price this year in a shut down exchange that will give me no proof of purchase.

So you've had these coins since before 2017?

If you don't know exactly when you received them, then check the blockchain - it knows. Then find a site with historical bitcoin prices - coinmarketcap will do. Look up the date from the blockchain in the price history. You don't need the exact second. A daily or weekly price is good enough. Now you have an approximate value for the coins you hold. You can use that as the initial basis and acquisition date for when you start trading.

Perhaps you never paid taxes on your historical gains. But that is in the past. When a computer is validating your current tax return, it won't be looking back at prior year returns. For all it knows, you bought some crypto years ago, did some trading but broke even, threw in the towel, and withdrew the coins, i.e. there was no tax due years ago.
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January 15, 2018, 08:05:37 AM
 #12

You can say that you bought it using cash but you need another person to prove that you bought it using cash. Just make a reciept of the transaction or something. If the coins can't be traced then try to make up a reasonable transaction reciept and point to that as the origin. Now it also depends on it you want to evade taxes. If you don't then create that transaction equal to the one you purchased it at. Then you will pay the right taxes. Other wise you can do say you bought it at a higher price and evade taxes but if found out that can be difficult for you.
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January 15, 2018, 08:34:29 PM
 #13

How should I claim my initial coins to start day trading?
Should I claim them as they were gift from someone? or inherited from someone? or Should I just claim that I bought them expensive?

....

It depends on what country or state you reside in. I can only comment if you're an american citizen living inside the USA.

1. Gift. Taxation on gifts has seen many new restrictions introduced over the years. I think it depends on the monetary amount. Quick google search says up to $14,000 go tax free on federal taxes. Quick search says conneticut and tennessee are the only two states in the USA with a state level gift tax.

2. Inheritance. In the USA there is something known as a "death tax" aka estate tax. I think it goes as high as 40% taxation.

3. Purchased. If it was purchased I think you'll be required to pay whatever profits were earned from the purchase date leading up to the day when your ICO's are exchanged for fiat.

That's a quick overview of the pros versus cons. As far as america goes anyway.

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January 17, 2018, 11:52:17 AM
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Quote
Ok next question I would like to ask that you are looking how to tax your amount or how to evade tax?

Regarding taxation, if you can't verify input amount with adequate proofs, whole final amount will be consider as your income. So you have to pay income tax on whole amount according to US tax slabs of 10%, 15%, 25%, 28%, 33%, 35%, or 39.6%.

Regarding evasion, I can't suggest you any viable mean. You have to co-meet local accountant and blockchain advisor to reach adequate measure.

Oh wow, that is a very good reason to keep all your receipts and accounts in order. Frankly, I don't have huge investments but I would not like to pay tax on something I have not earned. I am not and US resident, and I am happy bout that when it cames to taxes.
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