Bitcoin tax question

[Palmerson]

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?

The tax authorities always interpret uncertainty in the legislation in their favor. They will require you to pay tax. Perhaps you will prove your case in court. But the cost of a lawyer can exceed the amount of the required tax. The image of the US as a democratic and free country is very exaggerated. This is not the best country to use cryptocurrencies.

[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?

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.

Paying taxes in crypto has nothing to do with the level of centralization, and everyone paying taxes in crypto would not mean the currency is centralized. The two things are completely separate issues, and not even linked in any discernible way. Centralization has to do with control, and it is unequivocally decentralized. If the government accepted tax payments in Bitcoin, it would be no different than a merchant selling products for Bitcoins - just another place to spend it. It speak nothing of centralization.

[Lancusters]

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.

Paying taxes in crypto has nothing to do with the level of centralization, and everyone paying taxes in crypto would not mean the currency is centralized. The two things are completely separate issues, and not even linked in any discernible way. Centralization has to do with control, and it is unequivocally decentralized. If the government accepted tax payments in Bitcoin, it would be no different than a merchant selling products for Bitcoins - just another place to spend it. It speak nothing of centralization.

You're right. This is not centralization but do you have any idea what will happen if the government will sell all the bitcoins they received as tax at the end of the year? You little mt.gox? Do you want the market to be constantly feverish? In addition, in order to take a tax in bitcoins, governments must recognize it as a currency. You believe that?

[richardsNY]

do you have any idea what will happen if the government will sell all the bitcoins they received as tax at the end of the year?

They won't have to sell any Bitcoins because they will never directly deal with them. Governments partner with payment gateways to have them convert everything to fiat and that's really it. Governments accepting crypto to pay for tax do that solely to lower the bar and make it easier for people to start paying due taxes. It's a major difference when people end up using their in value increased coins to pay due taxes over the fiat they have in their bank accounts. Technically it's the same all the way through, but psychologically it's easier for people to pay $1000 worth of Bitcoin than actually $1000 in fiat. It's a smart move from governments.

[Ar.harry]

Its good sign that the tax should be taken on bitcoin.  Tax proves that it is legal.

[Coffee135]

Its good sign that the tax should be taken on bitcoin.  Tax proves that it is legal.

The tax does not prove anything. Tax it is only then that you become less of your hard-earned money. Those who earn money dishonestly never pay taxes. Bitcoin will never be recognized by the government. They are satisfied as is. Bitcoin does not compete with Fiat and even supports Fiat because all purchases we make after the exchange. And taxes are easier to control through Fiat. Why would the government change anything?

[Bharat24]

First of all Bitcoin should be legalization in the country then we mast pay tax for the benefit of the government e.g. for the coustration of bridges and roads.

[Monikadhiman]

Because it does not exist online, bitcoin tax can not be paid, I have met some types of tax expert.

It is still an income that you have to declare, so you may have to pay some money.

[charina]

well i think some countries really do have different style and laws regarding taxation...every now and then they change their laws regarding taxes to gain more taxes from people...pretty clever of them...

[Mahanton]

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.

Paying taxes in crypto has nothing to do with the level of centralization, and everyone paying taxes in crypto would not mean the currency is centralized. The two things are completely separate issues, and not even linked in any discernible way. Centralization has to do with control, and it is unequivocally decentralized. If the government accepted tax payments in Bitcoin, it would be no different than a merchant selling products for Bitcoins - just another place to spend it. It speak nothing of centralization.

You're right. This is not centralization but do you have any idea what will happen if the government will sell all the bitcoins they received as tax at the end of the year? You little mt.gox? Do you want the market to be constantly feverish? In addition, in order to take a tax in bitcoins, governments must recognize it as a currency. You believe that?

Recognized as a currency? I dont think so and its not really necessary for them to made such step just to get some tax to those people who do involve on crypto. A simple recognition would already be enough. This would still depend if they would impose strict compliance but basically they would still end up on tie-ing up themselves on exchangers which are the ones to be regulated for them to able to track it out and get tax but when we do speak about direct pay up i dont even think peopel will be willing to do so.

[hacekd]

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.

it becomes a part of the government to regulate the crypto entering their country taking advantage to improve the economy of the country that indirectly protects its citizens from things that are not in want I think this is a very natural thing.

[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?

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.

Paying taxes in crypto has nothing to do with the level of centralization, and everyone paying taxes in crypto would not mean the currency is centralized. The two things are completely separate issues, and not even linked in any discernible way. Centralization has to do with control, and it is unequivocally decentralized. If the government accepted tax payments in Bitcoin, it would be no different than a merchant selling products for Bitcoins - just another place to spend it. It speak nothing of centralization.

You're right. This is not centralization but do you have any idea what will happen if the government will sell all the bitcoins they received as tax at the end of the year? You little mt.gox? Do you want the market to be constantly feverish? In addition, in order to take a tax in bitcoins, governments must recognize it as a currency. You believe that?

Your response doesn't make sense. If the government is taking in Bitcoins as a tax revenue, why would they "sell" those Bitcoins as opposed to spending them like they do with any other revenue source. If the economy is denominated in Bitcoins, there would be no need to "sell" them, you would just spend them. That would have no affect on Bitcoins if everything is denominated in Bitcoins, it only potentially matters if everything is denominated in dollars, including Bitcoin. But that assumption doesn't make sense because you'd have to assume as a given that everything in the economy is denominated in BTC and the USD has been abandoned in order to even entertain the notion that the government is taking tax revenues in the form of BTC. Your response doesn't even follow the thread of what has being discussed, which was whether paying taxes in BTC has any bearing on centralization of BTC, and then you came in out of left field with a bucket of crazy about feverish markets and Mt. Gox. I have no idea what point you were trying to make, but it didn't come across.

[Bitknick]

In my opinion, it is too early to talk about taxes until the states recognize and come up with a legislative base for this!

[Jose Rizal]

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?

It was really expensive, and they set an independent charge that will be a burden for everyone to reach if they will be requiring to pay those, I guess that's not a good thibg for everyone especially for those who contain small amount of token which is a great deduction if the charge and fees were at high deal, bht who are we to complain we are not allowed to get profit if we dont agree with that.

[davit putra]

Bitcoin is not legal and is still difficult to use for local transactions, I think if the government wants taxes, the government must legalize bitcoin, and recognize bitcoin is equivalent to fiat money.

[rosymadaan7]

Tax is integral part of government income.  We should pay taxes on bitcoins income. When we start to pay taxes on bitcoins itwill help government to create better life style of local peoples. My suggestions in this we have to pay taxes on bitcoins income

[iconternal]

I think you are not wrong, and taxation crypto I think is less precise because if we suffered losses in trade and we are still taxable it will be very detrimental to us users crypto.

[Jarijah]

I do agree with a lot here, that there is not 1 uniformal right answer for everyone.

what i do understand is that government taxes all incomes, unless they give exemptions that people can apply for.
If crypto-trading is not specifically mentioned, the closest example you could compare it to, is how profits earned through stock trading and forex trading are taxed.

But assuming you don't have to pay, is always a gamble in my opinion.

[Eleven86]

Taxation is depends upon the government of the country. If you addressed to pay tax for bitcoin means you have to pay. I think still there is no tax announced for bitcoin in any country. If the government forced to pay means then it is good for country's economic growth. For bitcoin transaction we have to pay the transaction fee only not tax.

[Zohina]

You have to declare all income, no matter what it is. It does not matter to the tax authorities, how you obtained that income

and if it was not defined or regulated at the time. It is still a income that you had to declare, so you might have to pay some

sort of penalty or declare the income in the next financial year. Just go speak to them and ask the questions from them and

they might even expunge the penalties. I spoke to my authorities and they helped me to declare the income from previous

years, without any penalties. 

it is possible that the application of bitcoin tax can not be applied in a country that has not yet acknowledged the currency of cryptocurrency, for example bitcoin owners in Indonesia, they still can not pay transaction taxes, may only be able to pay commodity tax, because in that country bitcoin is considered a commodity and an infestation.