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Author Topic: Taxation - How likely is the government going to tax US traders  (Read 73 times)
Rodzz
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January 15, 2018, 11:36:48 PM
 #1

What is everyones perception on the tax code? Obviously coinbase will be reporting all data to the IRS in the long run. Do you think the future president after Trump will re-categorize crypto as stock? Long term capital gains are manageable. It seems that it would be almost  impossible for the IRS to have exact prices of each every trade even if  exported correctly from the exchanges used.

First post, FYI
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exstasie
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January 15, 2018, 11:57:43 PM
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What is everyones perception on the tax code?

It's pretty brutal. Wink

The new GOP tax overhaul makes it worse in some ways, too. You will no longer be able to deduct custodial losses, meaning it will be increasingly important to hedge against exchange risk. For example: If you make a bunch of trades that trigger short term capital gains liabilities, and then you lose all your money to an exchange hack, the IRS will still expect you to pay taxes on the capital gains.

Do you think the future president after Trump will re-categorize crypto as stock? Long term capital gains are manageable.

The IRS already declared that digital currency is treated as "property" under the tax code. That means that capital gains rates (both short-term and long-term) apply. There isn't much difference in the treatment of Bitcoin vs. stocks. There are some differences when you start to look at taxation of coins that emerge from a hard fork split, airdrops, income derived from staking, etc. Buying/selling bitcoin is much simpler, though.

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January 16, 2018, 01:52:38 AM
 #3

...

My understanding is that exstasie is correct.

Our tax accountant has told me that as far as she knows it will be treated like other speculations, short-term and long-term capital gains.

Note that the IRS uses, at least somewhat, advanced software that can track BTC transactions, "Chainalysis" is one.

Smart (US) people will take note of when (and for what amount of FIAT$) they use to buy and sell BTC, and then to comply with the regulations.
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January 19, 2018, 06:53:01 AM
 #4

...

My understanding is that exstasie is correct.

Our tax accountant has told me that as far as she knows it will be treated like other speculations, short-term and long-term capital gains.

Note that the IRS uses, at least somewhat, advanced software that can track BTC transactions, "Chainalysis" is one.

Smart (US) people will take note of when (and for what amount of FIAT$) they use to buy and sell BTC, and then to comply with the regulations.

Sorry I'm not exactly familiar with Chainanalysis but I have heard about it.  Do you know how that would work with privacy coins such as Monero? How would they be able to know what you have?
Rodzz
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January 19, 2018, 06:58:06 AM
 #5

What is everyones perception on the tax code?

It's pretty brutal. Wink

The new GOP tax overhaul makes it worse in some ways, too. You will no longer be able to deduct custodial losses, meaning it will be increasingly important to hedge against exchange risk. For example: If you make a bunch of trades that trigger short term capital gains liabilities, and then you lose all your money to an exchange hack, the IRS will still expect you to pay taxes on the capital gains.

That sounds awful. Thanks for explaining that. I'm going to have to read further into it. I was told differently by others that you could deduct losses just like capital losses on stock trades but maybe they were referring to the tax from 2017.

 


GTX980Power
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January 19, 2018, 07:30:54 AM
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 #6

I have a friend of mine who is really fucked off because of the hugh taxes that he needs to pay because of the IRS, he is really so screwed up because of that. he is going to pay $1500 a mont, and he is not even earning more than 0.50 BTC a month.

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January 19, 2018, 08:05:59 AM
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I'm wonder! Why there are some reason about payment of taxes that bitcoin is a tax free. For me if goverment ask and force bitcoin to pay taxes, the real solution is only in the organizer or the founder, it will absolutely happen, that someday bitcoin will be collected or paying a tax to government it depends on the situation and approval of the opposite side between bitcoin owner and the government.
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January 19, 2018, 02:43:52 PM
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I have a friend of mine who is really fucked off because of the hugh taxes that he needs to pay because of the IRS, he is really so screwed up because of that. he is going to pay $1500 a mont, and he is not even earning more than 0.50 BTC a month.


Did he not disclose his earning? I read that the IRS was able to pull the coinbase records for those who withdrew 20K or more in last few years.
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April 19, 2018, 12:14:30 PM
 #9

Taxation on cryptocurrency traders and their earnings are not far behind, taxation is coming and a lot of people will have to pay off their taxes from even previous earnings which is how the government is planning to discourage people from using cryptocurrencies but it won't work either. They just need to find an efficient way to tax earnings based on what is actually being earned now and not before.


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Deubila
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July 23, 2018, 10:00:06 PM
 #10

Taxation on cryptocurrency traders and their earnings are not far behind, taxation is coming and a lot of people will have to pay off their taxes from even previous earnings which is how the government is planning to discourage people from using cryptocurrencies but it won't work either. They just need to find an efficient way to tax earnings based on what is actually being earned now and not before.
To me they just need to find an effective way to collect taxes based on what is actually being earned now and not before. It is certain that the high profit market and the bait of the rulers also want to have a good meal. At this point, investors should consider and make plans to achieve their goals.

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July 23, 2018, 10:53:34 PM
 #11

Exchanges are still going to be taxed and governments will continue to probe into the dealings of some exchanges when they deem these exchanges dubious. I believe exchanges should be transparent enough to avoid government sanctions that may lead to FUDs among their customers. Due taxes should be paid on time to avoid any altercations with governments who would want to find and means to discredit crypto.
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August 07, 2018, 07:48:36 AM
 #12

I have a friend of mine who is really fucked off because of the hugh taxes that he needs to pay because of the IRS, he is really so screwed up because of that. he is going to pay $1500 a mont, and he is not even earning more than 0.50 BTC a month.


That made my friend a pity. The amount of money spent is quite costly with the expenses, making the income decrease. Makes him very disappointed right? But I believe there will be change, you do not worry too much that affect health. The policy will be improved for true investors.

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August 14, 2018, 10:40:43 AM
 #13

tax can make trading volume decrease. if the tax imposed on crypto is high enough, then traders will object to that.

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