When to report crypto on taxes?

[Findingnemo]

snip~

That's why you walways need to be smart about it. People who knowingly break the law and then brag about it on social media aren't smart.

Spending can also be done in various ways. If you sell your coins withour exposing yourself through KYC and then spend it on gadgets, furniture and electronics no tax man is going to know about it. He is not going to follow you with a camera filming you buying a new macbook or a set of rims for your car. Buy a house and you won't be able to hide it.

It depends on your situation. How you got it, how you sold it, where you live, what's your income. Hiding a sale of 1 bitcoin worth 8 thousand dollars is easy when you earn 50 thousand a year. Much harder when you're unemployed on benefits.

Furniture or gadgets also can leads you to traced by the tax officials because you are buying it and you are getting a printed bill means it is getting stored somewhere.So you have to spend fiat as physical fiat in your locale will be good.

Or just go for darkweb where you can buy anything with cryptos but 99% of offers you are seeing on darkweb are fake one.

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[Lucius]

I am not an expert on these issues but in our local Croatian section of the forum we have a person who has already communicated with the tax office and passed us the official opinion of the tax service on bitcoin or crypto earnings.
The 2 most important things are that we only pay tax when we exchange crypto to local currency and transfer it to a bank account and we pay 12% tax on it plus City tax (prirez).

Second option is to hold 2 years, and then we can sell without paying taxes (of course with proof of purchase), if this is accurate information. Of course there is a third option, quite legal in our country (for now) where we can sell daily up to some 1000 EUR of crypto without ID/KYC in our crypto bank.

[Malvika_sitlani]

It is better to keep your invoices with you, we don't know when we need it. I have kept all my transaction history in a CSV format for a safer side.

[pixie85]

snip~

That's why you walways need to be smart about it. People who knowingly break the law and then brag about it on social media aren't smart.

Spending can also be done in various ways. If you sell your coins withour exposing yourself through KYC and then spend it on gadgets, furniture and electronics no tax man is going to know about it. He is not going to follow you with a camera filming you buying a new macbook or a set of rims for your car. Buy a house and you won't be able to hide it.

It depends on your situation. How you got it, how you sold it, where you live, what's your income. Hiding a sale of 1 bitcoin worth 8 thousand dollars is easy when you earn 50 thousand a year. Much harder when you're unemployed on benefits.

Furniture or gadgets also can leads you to traced by the tax officials because you are buying it and you are getting a printed bill means it is getting stored somewhere.So you have to spend fiat as physical fiat in your locale will be good.

Or just go for darkweb where you can buy anything with cryptos but 99% of offers you are seeing on darkweb are fake one.

And how would tracing me with a bill work? I go to the store, buy something, get a bill that says date, time, name of the article and price, that's it.
How does that point towards me?

We could be paranoid and say the cameras are there and someone can see my face and recognize me, but that's not a murder case. Nobody is going to go through the tapes to try to identify someone who recently bought a tv with Bitcoins

[Harlot]

Does anyone ever claim/report their crypto purchases/sales?
What is your threshold for reporting?
I was thinking no one bothers unless you withdraw hundreds of thousands of dollars.

This is where a lot of people are wrong about taxes, they think that if it is small enough or won't go over the AML threshold it would go under the radar from their taxing authorities and yes they are right about it but they are wrong about evading their taxes and they are actually committing fraud while doing it. It's always wrong when you are not stating your full earnings during that year and it won't good to no one's eyes except yours remember that taxes are an obligation not some kind of choice where people can choose what amount they just want to pay. And based from your previous post I think you live in the USA and from what I know the IRS is actually strict when it comes to your tax report yearly.

[Lucius]

And how would tracing me with a bill work? I go to the store, buy something, get a bill that says date, time, name of the article and price, that's it.
How does that point towards me?

Maybe he was referring to the payment being done online, when the whole thing involved shipping, and buyer need to give his home address/name for delivery. If you pay this way, tax office can always ask store to provide them with all the information they require, and so can identify anyone who pays with crypto.

Paying with crypto directly in store without any ID or KYC it will certainly not cause any investigation, especially for small amounts. However, it should be emphasized that most of those who accept crypto do it through payment processors, and that the conversion takes place right there, the buyer pays in crypto and the seller gets fiat. However, it all depends on the total amount and capacity of the tax administration to investigate such cases.

[Findingnemo]

And how would tracing me with a bill work? I go to the store, buy something, get a bill that says date, time, name of the article and price, that's it.
How does that point towards me?

We could be paranoid and say the cameras are there and someone can see my face and recognize me, but that's not a murder case. Nobody is going to go through the tapes to try to identify someone who recently bought a tv with Bitcoins

Bill contains your name and your contact number which will be liked yo your national identity so yes there are chances to get traced if you are buying expensive gadgets too often but still the chances are less. But in future AI cameras will do the work which you think it can never be possible and its already implemented in China and sooner it will take all over the world so you will have no privacy, each and every activity of you will be recorded.

[malevolent]

Bill contains your name and your contact number which will be liked yo your national identity

I'm not asked for my personal information when I pay in cash if it's not something the government wants to know about or wants to have a paper trail to look into (vehicles, real estate, certain very specific items the government likes to keep track of).

[pixie85]

Bill contains your name and your contact number which will be liked yo your national identity

I'm not asked for my personal information when I pay in cash if it's not something the government wants to know about or wants to have a paper trail to look into (vehicles, real estate, certain very specific items the government likes to keep track of).

That's what I had in mind. Cash payments don't require any ID and it's the same with Bitcoin payments. Even if the item gets delivered to your house it's not going to be grounds to prosecute you because you can't be identify as the person who paid for it. You could be taking the delivery for someone else and it's not like you have to sign it with your own name. When I get something delivered they just tell me "we have a package for ... please sign" They don't even ask if I'm that person. I had friends who were at my house receive deliveries for me without any problems.

If you have to register as legal owner of the thing like when you buy land it's different and easy to trace but you can buy a watch worth much more than a new car and never have to sign anything or show an ID.

There also other ways like ATMs that don't require you to scan your ID. There are exchanges that allow you to withdraw in an ATM without any KYC.

[squatter]

I'm not asked for my personal information when I pay in cash if it's not something the government wants to know about or wants to have a paper trail to look into (vehicles, real estate, certain very specific items the government likes to keep track of).

That's what I had in mind. Cash payments don't require any ID and it's the same with Bitcoin payments. Even if the item gets delivered to your house it's not going to be grounds to prosecute you because you can't be identify as the person who paid for it.

No one is going to look into a one-off occurrence either way, but if have loads of unexplained property coming in to the extent that it's noticeable, problems can arise. That's why programs like "Too Much Bling, Give us a Ring!" exist, to get people to snitch on their neighbors to the tax authorities. If that happens and they do a little digging, they might find out more than you'd like about your unreported Bitcoin activity.