what i don't get about the taxes thing, is lets say you purchase something with crypto. what tax would be applied to that event?
The value you got for the crypto minus what you paid for it is a capital gain. That is the taxable event. Every trade, every transaction now creates a taxable event. If you took a loss then you can deduct the loss (if you can document it) from your other capital gains.
You are all running around talking about how great it is that DGB (and others) are not considered a security and then give bogus BS statements like above.
Do you even know the difference between securities, capital gains, income tax, and how they relate?
Short-term capital gains occur on securities held for one year or less. These gains are taxed as ordinary income based on the individual's tax filing status and adjusted gross income. Long-term capital gains are usually taxed at a lower rate than regular income. The long-term capital gains rate is 20% in the highest tax bracket. Most taxpayers qualify for a 15% long-term capital gains tax rate.
What this means is that for all of you, and we are talking about more than 95% here that claim to be HODL'rs - your coins will be held for longer than a year. If that is the case, then you will reap NO BENEFIT from DGB (or others) not being considered a security, and the lower tax rate that comes from long-term capital gains.
I understand where you got your answer above, from the most recent IRS published position on crypto. But a distinction and better understanding of securities, long and short-term capital gains, as well the difference between capital gains tax rates versus regular income should be the focus. If the SEC adopts a position, the IRS has to adjust their position to meet that set standard. One sets the criteria and the other enforces it (at the barrel of a gun and threat of prison).
I have never seen an IRS agent at the convenience store making sure that I pay the proper tax. I am never going to see one there making sure I have documentation that I paid all taxes required on my crypto prior to exchanging it for real-world goods.
However, I can assure you that if DGB (or any crypto) 'moons' and you have them for more than a year, cashout on an exchange, they will be there and you are going to wish the crypto had been considered a security and taxed at the long-term capital gains rate rather than at the regular income tax rates.
btw; the exact percentages above are older numbers yet the difference between the two (income vs capital gains taxes) remains (and with good reason).
Also - I am only speaking to the U.S.A.
