Bitcoin tax question

[swscowods]

Im a US citizen and am still confused with the current crypto tax interpretation. In October of 2017 I traded some litecoin for another crypto. Then in January 2018 the tax bill passed and eliminated the like to like exchanges of crypto.

My interpretation is that since I made the trade before the law changed then I did not create a taxable event. Am I wrong in this interpretation?

Some forces are trying to consider Bitcoin as an asset so that they may be able to get taxes on everything a Bitcoin user buys. Bitcoin is not an asset but a currency which is favorable for transaction of money and a source of investment therefore it is a currency and not an asset. Bitcoin user should not pay tax on Bitcoins because this is your own money and not an asset.

[Tungsten-1]

Im a US citizen and am still confused with the current crypto tax interpretation. In October of 2017 I traded some litecoin for another crypto. Then in January 2018 the tax bill passed and eliminated the like to like exchanges of crypto.

My interpretation is that since I made the trade before the law changed then I did not create a taxable event. Am I wrong in this interpretation?

Some forces are trying to consider Bitcoin as an asset so that they may be able to get taxes on everything a Bitcoin user buys. Bitcoin is not an asset but a currency which is favorable for transaction of money and a source of investment therefore it is a currency and not an asset. Bitcoin user should not pay tax on Bitcoins because this is your own money and not an asset.

Tax is not a bad thing and all the money a government has in the account is actually the tax money that it uses for the defense and development of the infrastructure of the country. If government intervenes in the crypto and implements regulations in the use of Bitcoin technology, it can very soon implement a taxation law as well and all the people who earn from the technology should pay the income tax which I would never like.

[huige007]

Im a US citizen and am still confused with the current crypto tax interpretation. In October of 2017 I traded some litecoin for another crypto. Then in January 2018 the tax bill passed and eliminated the like to like exchanges of crypto.

My interpretation is that since I made the trade before the law changed then I did not create a taxable event. Am I wrong in this interpretation?

Bitcoin is not an asset and one should not pay taxes on Bitcoin or other cryptocurrencies as this is called a digital currency and has no physical existence and besides it this is not the asset of a center so we should not pay and why should we pay tax if we are working without the help of others and making money for ourselves without the involvement of governments then it is all ours to keep.

[KorakPawon]

Im a US citizen and am still confused with the current crypto tax interpretation. In October of 2017 I traded some litecoin for another crypto. Then in January 2018 the tax bill passed and eliminated the like to like exchanges of crypto.

My interpretation is that since I made the trade before the law changed then I did not create a taxable event. Am I wrong in this interpretation?

So, if an investor sells a crypto currency after holding it for more than a year, then the profit is usually a long-term capital gain. If previously you are not taxed then when the regulation made for your taxes will be imposed because you are still using crypto at the time the regulation is made.

[posi]

You're not wrong OP and I'm surprised either that you're been charged for the crypto currency transaction you did right before the crypto currency tax bill was passed and it either the exchange site were the one doing this on their own or they are trying to please the law maker.

[Sandeep24]

If government wants to collect tax on your trading then it is legal.

[tsveti1009]

We need to be smart ,like a criptocurency

[jaysabi]

Im a US citizen and am still confused with the current crypto tax interpretation. In October of 2017 I traded some litecoin for another crypto. Then in January 2018 the tax bill passed and eliminated the like to like exchanges of crypto.

My interpretation is that since I made the trade before the law changed then I did not create a taxable event. Am I wrong in this interpretation?

As a rule, laws do not work 'backwards' which means any now-unlawful activity which was commited before the law came into effect, is not restricted by that law.

Tax laws generally don't work that way. If they pass an update for the tax law, it will usually apply to the entire year, even if it was not passed until the end of the year. This is especially the case because you use the laws that are in place at the time you file your taxes, and you file your taxes several months after the end of the year, so you will have to use the laws in place at that time. If they pass a law changing the tax rate on dividends or income in December, it will apply to all the dividends and income you earned all year, not only after December. Tax laws routinely "work backwards."

[Gadhoh]

Im a US citizen and am still confused with the current crypto tax interpretation. In October of 2017 I traded some litecoin for another crypto. Then in January 2018 the tax bill passed and eliminated the like to like exchanges of crypto.

My interpretation is that since I made the trade before the law changed then I did not create a taxable event. Am I wrong in this interpretation?

As a rule, laws do not work 'backwards' which means any now-unlawful activity which was commited before the law came into effect, is not restricted by that law.

Tax laws generally don't work that way. If they pass an update for the tax law, it will usually apply to the entire year, even if it was not passed until the end of the year. This is especially the case because you use the laws that are in place at the time you file your taxes, and you file your taxes several months after the end of the year, so you will have to use the laws in place at that time. If they pass a law changing the tax rate on dividends or income in December, it will apply to all the dividends and income you earned all year, not only after December. Tax laws routinely "work backwards."

the government makes a taxation regulation which means there is a huge benefit for bitcoin users therefore a tax on aga agaar what not only the government can benefit but also all the risks later government will take responsibility.

[ruthbabe]

you talking tax, while the legality of bitcoin is still questionable. I think it's still too early to talk about tax issues.

I think you should do more research. Currently, there are around 70 countries worldwide where bitcoin is welcomed and its use is legal, and also being taxed by some countries along with other cryptocurrencies. In the United States alone, Bitcoin is legal in all of its states and territories. However, although it can be used like money the government or IRS does not consider it to be money or legal tender, instead, they treat bitcoin (and altcoins) just like gold as property for tax purposes.

[jonjudenneka]

I wonder what happens during a crash; the government should provide compensation.

[chasoka]

I wonder what happens during a crash; the government should provide compensation.

Perhaps. 

[Ar.harry]

Tax is good thing that to be paid for every profit gain from the bitcoin. So that the tax should be used for the social and economical condition of the nation. But for the tax, governments of all countries should have to make bitcoin legal in their country so that to take tax on bitcoin.

[detector]

Usually I'm convert my btc into fiat and they have apply tax for it. So you can check when you try to withdraw your btc through exchange !
As long as you've been apply on tax, I think you're worry less

[anchaldhiman15]

For tax, government should have to make bitcoin legal in their country. because tax is only to be paid on legal profit gains. so i think its a good idea, make it legal in all countries and take tax. So that the collected tax should be use for the development of nation.

[Oceat]

Im a US citizen and am still confused with the current crypto tax interpretation. In October of 2017 I traded some litecoin for another crypto. Then in January 2018 the tax bill passed and eliminated the like to like exchanges of crypto.

My interpretation is that since I made the trade before the law changed then I did not create a taxable event. Am I wrong in this interpretation?

Some forces are trying to consider Bitcoin as an asset so that they may be able to get taxes on everything a Bitcoin user buys. Bitcoin is not an asset but a currency which is favorable for transaction of money and a source of investment therefore it is a currency and not an asset. Bitcoin user should not pay tax on Bitcoins because this is your own money and not an asset.

Tax is not a bad thing and all the money a government has in the account is actually the tax money that it uses for the defense and development of the infrastructure of the country. If government intervenes in the crypto and implements regulations in the use of Bitcoin technology, it can very soon implement a taxation law as well and all the people who earn from the technology should pay the income tax which I would never like.

If everyone is paying taxes in crypto then i think crypto is not yet decentralized anymore and with the help of all kinds of regulation that the government are implying. Then we have to face the new face of centralized cryptocurrencies but above all most of the countries are not yet ready for this kind of situation and some are avoiding it at all cost for some reason.

[Lanatsa]

Im a US citizen and am still confused with the current crypto tax interpretation. In October of 2017 I traded some litecoin for another crypto. Then in January 2018 the tax bill passed and eliminated the like to like exchanges of crypto.

My interpretation is that since I made the trade before the law changed then I did not create a taxable event. Am I wrong in this interpretation?

Some forces are trying to consider Bitcoin as an asset so that they may be able to get taxes on everything a Bitcoin user buys. Bitcoin is not an asset but a currency which is favorable for transaction of money and a source of investment therefore it is a currency and not an asset. Bitcoin user should not pay tax on Bitcoins because this is your own money and not an asset.

Tax is not a bad thing and all the money a government has in the account is actually the tax money that it uses for the defense and development of the infrastructure of the country. If government intervenes in the crypto and implements regulations in the use of Bitcoin technology, it can very soon implement a taxation law as well and all the people who earn from the technology should pay the income tax which I would never like.

If everyone is paying taxes in crypto then i think crypto is not yet decentralized anymore and with the help of all kinds of regulation that the government are implying. Then we have to face the new face of centralized cryptocurrencies but above all most of the countries are not yet ready for this kind of situation and some are avoiding it at all cost for some reason.

Cryptocurrencies wont really come to a point that it would become centralized.They might able to be stopped or regulated by means of exchangers but not totally coming to a point that government can able to control how the funds circulates. Unless if they do create their own centralized coins then its not entirely different from traditional fiat. Taxation when it comes to bitcoin earnings would be always basing or can be seen thru on your transactions being made if you are on an exchanger. Laws of a country which do focus on this one will always look thru exchanges.

[jonland22]

Im a US citizen and am still confused with the current crypto tax interpretation. In October of 2017 I traded some litecoin for another crypto. Then in January 2018 the tax bill passed and eliminated the like to like exchanges of crypto.

My interpretation is that since I made the trade before the law changed then I did not create a taxable event. Am I wrong in this interpretation?

well if a new bill is passed normally its effectiveness will be prospective but if a court decision was made to an existing law most likely it should be retrospective or ever since the law is passed.
better to seek tax consultation from tax authority or professional in your place so you can have a clear understanding, ignorance of the law is not an excuse so you should deal seriously with this one.

[lokanot0]

In depends on the law of the land. In our country when a bill or law has been passed subsequent to the act done( which in your case trading of crypto)  it would have a retro active effect and you would still be taxed.

[vessing]

The anonymous essence of crypto currency complicates the process of taxation. kriptavalyuta contained in electronic purses (exchange or personal), access to which only the owner has. It turns out that it is impossible to determine the real amount of crypto currency in the taxpayer's wallet. Only the announced amount will be drawn. Hence, the authorities will have to believe a man on the floor?