Coinbase hands over information to the IRS

[player514]

Hey everyone, just wanted to update you guys with this recent article I found.

https://www.marketwatch.com/story/bitcoin-exchange-coinbase-is-handing-over-user-information-to-the-irs-2018-02-27

"Coinbase, one of the largest cryptocurrency exchanges, told customers Friday it will turn over 13,000 users’ data to the IRS within the next 27 days. The move comes in response to an IRS order issued in November 2016 to send records of users who bought bitcoin BTC, -1.48%  between 2013 and 2015 so the agency could determine who was evading cryptocurrency taxes. Coinbase initially resisted the order, but ultimately agreed to send the information of “higher-transacting” customers during that time."

What do you think the future of these taxes will be? Currently, as far as I know, in the United States, there is a tax based on your income bracket, and the tax can range from 0 - 20% of your net profit. Furthermore, it seems like this is pissing a lot of people off because they have to report taxes on every single transaction they make, and for some day traders, that's practically impossible. What are your takes on this situation? Do you think some anonymity has been lost in it?  Or is Coinbase just blatantly bad?

[jseverson]

If this goes on, I imagine Coinbase would come out with an exportable accounting sheet containing all relevant information of your trades, if they haven't yet. Difficulty in filing wouldn't really be an issue in this case, as I'm sure they log most if not all the relevant data anyway.

I don't think it's Coinbase's fault. The US wanted a way to tax crypto, so they would have found one one way or another.

[Pursuer]

tax laws for bitcoin in US has been there for nearly as long as bitcoin was being traded on exchanges and IRS has been hunting down tax evaders for centuries. whoever thought they could evade taxes while using a centralized exchange like Coinbase clearly didn't understand how the laws and the surveillance in their country works!

the public reports say 13,000 but I say Coinbase is and will be handing over every single user's data to IRS without a single doubt.
this has nothing to do with anonymity or anything. they are clearly trading on a centralized exchange with all their personal information already in their hands! and Coinbase or no other exchange out there ever promises to keep it from IRS or any other 3 letter agencies.

[electronicash]

oh no. definitely not coinbase fault. they can't just say no to the government else the government will seize whatever they got forcibly. it looks like we are going to be going there and most exchanges might just be handing over their data too.  it might take more years before my country's government will collect our data too.

[Hellobx]

I'm curious about how to tax, and if all the buy and sales of the past need to be taxed, then this tax could be more than our profit.
And in other exchanges, there are a lot of people from other countries, so people in these other countries also need to tax, right?

[Herbert2020]

I'm curious about how to tax, and if all the buy and sales of the past need to be taxed, then this tax could be more than our profit.
And in other exchanges, there are a lot of people from other countries, so people in these other countries also need to tax, right?

first you need to figure out what your country's tax laws about bitcoin are. you can also consult some professionals in this matter, specially if you have been trading a lot i urge you to do this. their fee is nothing compared to what fines you may have to pay if you don't pay your taxes.
then you calculate them and pay it. and i believe the tax you pay is based on your "profit" not capital. so it can not be more than your profit.

[player514]

tax laws for bitcoin in US has been there for nearly as long as bitcoin was being traded on exchanges and IRS has been hunting down tax evaders for centuries. whoever thought they could evade taxes while using a centralized exchange like Coinbase clearly didn't understand how the laws and the surveillance in their country works!

the public reports say 13,000 but I say Coinbase is and will be handing over every single user's data to IRS without a single doubt.
this has nothing to do with anonymity or anything. they are clearly trading on a centralized exchange with all their personal information already in their hands! and Coinbase or no other exchange out there ever promises to keep it from IRS or any other 3 letter agencies.

I definitely see your point and this clears up a lot. Thanks for the clear explanation.

I also had a hunch that Coinbase would probably give every user's information to the IRS; there's not much for Coinbase to lose. I also understand the centralization and anonymity being lost due to the centralization which people have agreed to use anyway.

I'm curious about how to tax, and if all the buy and sales of the past need to be taxed, then this tax could be more than our profit.
And in other exchanges, there are a lot of people from other countries, so people in these other countries also need to tax, right?

For this, you should search up what your country's policies are on crypto currencies. Furthermore, I don't think you tax anything other than profits, so that should work out to be 0 if you're losing money.

[Nilda]

I wouldn’t mind having the info on my bitcoin wallet being handed to the taxman. People who have something to hide are the only ones worried about this.

[rodalutor]

Hey everyone, just wanted to update you guys with this recent article I found.

https://www.marketwatch.com/story/bitcoin-exchange-coinbase-is-handing-over-user-information-to-the-irs-2018-02-27

"Coinbase, one of the largest cryptocurrency exchanges, told customers Friday it will turn over 13,000 users’ data to the IRS within the next 27 days. The move comes in response to an IRS order issued in November 2016 to send records of users who bought bitcoin BTC, -1.48%  between 2013 and 2015 so the agency could determine who was evading cryptocurrency taxes. Coinbase initially resisted the order, but ultimately agreed to send the information of “higher-transacting” customers during that time."

What do you think the future of these taxes will be? Currently, as far as I know, in the United States, there is a tax based on your income bracket, and the tax can range from 0 - 20% of your net profit. Furthermore, it seems like this is pissing a lot of people off because they have to report taxes on every single transaction they make, and for some day traders, that's practically impossible. What are your takes on this situation? Do you think some anonymity has been lost in it?  Or is Coinbase just blatantly bad?

This is just the way that things will be from now on, coinbase find themselves between a rock and a hard place, they either comply or they are forced to shut down.

Taxes on cryptocurrencies will become clearer and easier in the future once the regulation is better defined and accountants familiarize themselves with it. Mostly you can just download a csv of all your transactions and use that to calculate things. It's not overly different from any tax procedure.

[yinyangwinwang]

Taxes future: Uncertain, but they will tax us.
Take: Ignorant, but expected.
Anonymity: Obviously lost, anon coins hopefully mitigate this.
Coinbase: They were always bad, now people are waking up and sniffing the cheese on this matter.

[aardvark15]

Hey everyone, just wanted to update you guys with this recent article I found.

https://www.marketwatch.com/story/bitcoin-exchange-coinbase-is-handing-over-user-information-to-the-irs-2018-02-27

"Coinbase, one of the largest cryptocurrency exchanges, told customers Friday it will turn over 13,000 users’ data to the IRS within the next 27 days. The move comes in response to an IRS order issued in November 2016 to send records of users who bought bitcoin BTC, -1.48%  between 2013 and 2015 so the agency could determine who was evading cryptocurrency taxes. Coinbase initially resisted the order, but ultimately agreed to send the information of “higher-transacting” customers during that time."

What do you think the future of these taxes will be? Currently, as far as I know, in the United States, there is a tax based on your income bracket, and the tax can range from 0 - 20% of your net profit. Furthermore, it seems like this is pissing a lot of people off because they have to report taxes on every single transaction they make, and for some day traders, that's practically impossible. What are your takes on this situation? Do you think some anonymity has been lost in it?  Or is Coinbase just blatantly bad?

The taxes will be capital gains so it will depend on the tax bracket and the length of time you held the assets. If you held for under a year before trading or selling, it will be short term capital gains at a higher tax rate. Otherwise it will be long term capital gains.

Also, my understanding is that even though it is reported to the IRS doesn’t mean you necessarily owe taxes. For example, if you buy $20,000 worth of Bitcoins and just hold, you don’t owe taxes yet but Coinbase may report that buy since it was $20,000.

[Umkar]

If in my country until such a tax is introduced, then for the time being I have nothing to fear. However, in the near future, I think, in almost all countries, crypto-currencies will be taxed everywhere. In this regard, anonymity in the crypto currency as such will practically cease to exist. However, it was naive to assume that the state would not notice the circulation of the crypto currency in its country and not to impose a high level of income on this activity by tax.

[darkangel11]

the public reports say 13,000 but I say Coinbase is and will be handing over every single user's data to IRS without a single doubt.

I'd say every single US resident. There's actually not much that the IRS can do with the personal details of non-residents that aren't under their jurisdiction.

As for Coinbase, their fees are bad enough to deter the smart users. There are other, cheaper exchanges with better prices and less requirements to get a verified account. It's an open market where we are free to choose. Now that we all know what Coinbase stands for we can compare them to other exchanges and make our choice.

[nsasuiteb]

That would happen ultimately, but it seems there is no problem for those who have little transaction and trading activity. That would be painful to pay lots of taxes after years.

[darkangel11]

If in my country until such a tax is introduced, then for the time being I have nothing to fear. However, in the near future, I think, in almost all countries, crypto-currencies will be taxed everywhere. In this regard, anonymity in the crypto currency as such will practically cease to exist.

Such a tax? Meaning that you don't have an income tax in your country? There are some great countries that don't, that's a fact, so if you're lucky to live in the Emirates or Monaco, you can enjoy your freedom, but most of the world requires you to submit tax reports, even if there's no direct bitcoin tax.

However, it was naive to assume that the state would not notice the circulation of the crypto currency in its country and not to impose a high level of income on this activity by tax.

For some people that were living outside the system it's a smart calculation. For instance if you're a hippie that's been living in a trailer somewhere, or a young guy living with parents, and at some point you got into cryptocurrencies and earned a couple million USD, it would be a smart thing to sell some of it and leave the country, or even better, leave the country and move to a tax haven for a while. You have nothing to lose, no important job, no property, and those 400k more for every million USD earned would make a huge difference.

[allycn]

I don’t think people using Coinbase were counting on the anonimity aspect of cryptocurrrncy, after all you have to provide a lot of info just to register. Although this doesn’t affect me currently as I am not US basedI do wonder if other countries will follow suit.

[AltcoinAuthority]

That would happen ultimately, but it seems there is no problem for those who have little transaction and trading activity. That would be painful to pay lots of taxes after years.

Paying that would be crazy. I would trade and not cash the money from the wallet till there is another exchange website available.

[coinwizard_]

They fought them as hard as they could but ultimately they always win in the end. It will be very difficult to calculate unless they only count the amount when it was converted into fiat, it is so volatile it can't be calculated on a daily basis. If you bought at ATH and it tanks, then what - tax rebate?!

[joeydangerous]

Hey everyone, just wanted to update you guys with this recent article I found.

https://www.marketwatch.com/story/bitcoin-exchange-coinbase-is-handing-over-user-information-to-the-irs-2018-02-27

"Coinbase, one of the largest cryptocurrency exchanges, told customers Friday it will turn over 13,000 users’ data to the IRS within the next 27 days. The move comes in response to an IRS order issued in November 2016 to send records of users who bought bitcoin BTC, -1.48%  between 2013 and 2015 so the agency could determine who was evading cryptocurrency taxes. Coinbase initially resisted the order, but ultimately agreed to send the information of “higher-transacting” customers during that time."

What do you think the future of these taxes will be? Currently, as far as I know, in the United States, there is a tax based on your income bracket, and the tax can range from 0 - 20% of your net profit. Furthermore, it seems like this is pissing a lot of people off because they have to report taxes on every single transaction they make, and for some day traders, that's practically impossible. What are your takes on this situation? Do you think some anonymity has been lost in it?  Or is Coinbase just blatantly bad?

You've received that email or did you get it just from that article?
Coinbase is targeting people that have or had accounts on there so they could get their information instead of the people that didn't leave the website.

[figmentofmyass]

What do you think the future of these taxes will be? Currently, as far as I know, in the United States, there is a tax based on your income bracket, and the tax can range from 0 - 20% of your net profit.

long term capital gains (if you hold for at least a year) are taxed at 15-20%---no more. short term capital gains get taxed at your normal tax rate, which can be a lot higher than that.

Furthermore, it seems like this is pissing a lot of people off because they have to report taxes on every single transaction they make, and for some day traders, that's practically impossible.

dealing with BTCUSD day trading is easy. that's just like stock trading or similar. altcoins are more of a hassle since you need to determine the USD value of every trade.

What are your takes on this situation? Do you think some anonymity has been lost in it?  Or is Coinbase just blatantly bad?

totally expected. i remember hearing brian armstrong say something like it was coinbase's goal to be the most compliant exchange in the space. they fought this in court..... what else could we really expect? openly defy the IRS and the courts?