USA capital gains

[henryreardon]

Am I required to pay capital gains on every separate profitable BTC sale I make?  Or only on the total gain from all my trades at the end of the year?

E.g. I make 3 buys, all appreciate, I sell all coins and clear 10K profit. But then, later that year, I buy some more, price drops the next day, I sell and take a 5K loss.  So at the end of that year do I owe capital gains on 10K or on 5K?

[hanwong]

You report all transactions delineated by date of purchase and date of sale.

Your losses will offset your gains. Your tax owed will be calculated on 5K profit.

[beetcoin]

but how does one prove when he purchased his BTC? what if i purchased it say 2 years ago, but in 1 year i want to sell off some coins and want to claim that i bought it 1 year prior.. i'd effectively pay significantly less since the value of BTC today is $1,000 more than last year, and it'd be 15% only.

[Minor Miner]

but how does one prove when he purchased his BTC? what if i purchased it say 2 years ago, but in 1 year i want to sell off some coins and want to claim that i bought it 1 year prior.. i'd effectively pay significantly less since the value of BTC today is $1,000 more than last year, and it'd be 15% only.

US capital gains is 20%.   plus another 3.8% if you make over 250k to pay for obamacare.   

[SaltySpitoon]

Depends, if you lose money, can you claim a tax refund for capital losses?

[Minor Miner]

Depends, if you lose money, can you claim a tax refund for capital losses?

NO.   They roll and you can write off $3500 of the loss each year.

[Minor Miner]

US capital gains is 20%.   plus another 3.8% if you make over 250k to pay for obamacare.   

There are lower tiers for capital gains including 0%.
Seek professional tax advice.

yes, there are also zero tax brackets.   Easy to get into them too.   

[beetcoin]

ah, it was 15% last year during the presidential election. i guess big brother needed to collect revenues somehow. 20% is too damn high. i guess i'd have to see a tax specialist.

[henryreardon]

yes, there are also zero tax brackets.   Easy to get into them too.   

I certainly will consult a tax professional, but could you expand on this?

[Minor Miner]

yes, there are also zero tax brackets.   Easy to get into them too.   

I certainly will consult a tax professional, but could you expand on this?

It was sarcasm.   google it.   if you make little enough, you pay no taxes.   same with capital gains.

[beetcoin]

you can do a little research before seeking help. i just looked up some info here http://www.bankrate.com/finance/money-guides/capital-gains-tax-rates-1.aspx

capital gains taxes apply if your taxable income is less than $35k (single) or $70k (joint).. otherwise, you don't have to pay them. so if you don't make that much money, you can buy/sell as you like.. so long as your total income does not exceed $35k. you also need to own the asset for more than 1 year before selling it, so no day trading.

[TheButterZone]

you can do a little research before seeking help. i just looked up some info here http://www.bankrate.com/finance/money-guides/capital-gains-tax-rates-1.aspx

capital gains taxes apply if your taxable income is less than $35k (single) or $70k (joint).. otherwise, you don't have to pay them. so if you don't make that much money, you can buy/sell as you like.. so long as your total income does not exceed $35k. you also need to own the asset for more than 1 year before selling it, so no day trading.

Shouldn't that less be more?

[beetcoin]

you can do a little research before seeking help. i just looked up some info here http://www.bankrate.com/finance/money-guides/capital-gains-tax-rates-1.aspx

capital gains taxes apply if your taxable income is less than $35k (single) or $70k (joint).. otherwise, you don't have to pay them. so if you don't make that much money, you can buy/sell as you like.. so long as your total income does not exceed $35k. you also need to own the asset for more than 1 year before selling it, so no day trading.

Shouldn't that less be more?

you're right.. i had a brain fart  

but yeah, if you made so much off bitcoins that you don't want to work.. you could just withdraw $35k a year without getting taxed and live off of that.

[hanwong]

but how does one prove when he purchased his BTC? what if i purchased it say 2 years ago, but in 1 year i want to sell off some coins and want to claim that i bought it 1 year prior.. i'd effectively pay significantly less since the value of BTC today is $1,000 more than last year, and it'd be 15% only.

you prove your purchases and sales by having good records. in an audit situation, the IRS generally will accept your records as long as they meet their standards for good recordkeeping, must have quantity, price, buy/sell dates. if you want to lie about your records, then you go ahead and lie on your taxes and suffer the consequences if you get caught. if you don't get caught, then you don't get caught. how will the IRS know if you are lying? well...

[mb300sd]

you can do a little research before seeking help. i just looked up some info here http://www.bankrate.com/finance/money-guides/capital-gains-tax-rates-1.aspx

capital gains taxes apply if your taxable income is less than $35k (single) or $70k (joint).. otherwise, you don't have to pay them. so if you don't make that much money, you can buy/sell as you like.. so long as your total income does not exceed $35k. you also need to own the asset for more than 1 year before selling it, so no day trading.

I'm trying to actually get through this, how does it work if 100% of my income was capital gains? Say I bought for negligible amounts of $ back in 2010, and cashed out $100K this year. Is it 0% on all of it, 0% on the first $35k, 15% on the rest, or 15% on all of it?

[dmartig]

has the irs made a definitive ruling on how to report gains from bitcoin exchange? if so where can i find that ruling?

[beetcoin]

you can do a little research before seeking help. i just looked up some info here http://www.bankrate.com/finance/money-guides/capital-gains-tax-rates-1.aspx

capital gains taxes apply if your taxable income is less than $35k (single) or $70k (joint).. otherwise, you don't have to pay them. so if you don't make that much money, you can buy/sell as you like.. so long as your total income does not exceed $35k. you also need to own the asset for more than 1 year before selling it, so no day trading.

I'm trying to actually get through this, how does it work if 100% of my income was capital gains? Say I bought for negligible amounts of $ back in 2010, and cashed out $100K this year. Is it 0% on all of it, 0% on the first $35k, 15% on the rest, or 15% on all of it?

i wouldn't know for sure, i'm not an expert on taxes... but i believe it is 0% tax on the first $35,000 and 20% for anything after that. so your effective tax capital gains tax rate would be 20% of $65,000. it's no longer 15% btw.

[dmartig]

http://www.irs.gov/publications/p550/ch04.html#en_US_2012_publink100010737

[beetcoin]

http://www.irs.gov/publications/p550/ch04.html#en_US_2012_publink100010737

that's 2012. the 15% was change to 20% in 2013.

[mgio]

but how does one prove when he purchased his BTC? what if i purchased it say 2 years ago, but in 1 year i want to sell off some coins and want to claim that i bought it 1 year prior.. i'd effectively pay significantly less since the value of BTC today is $1,000 more than last year, and it'd be 15% only.

US capital gains is 20%.   plus another 3.8% if you make over 250k to pay for obamacare.   

No, US long term capital gains is usually 15%.

It is only 20% if you make over about $400k AGI. Very few people are in that bracket.