Capital Gains Tax on Cryptocurrency

[inspireme247]

Because my family member gave me cash, I made a purchase in my name so I am holding the coin for that person. The problem is, it will affect my capital gains tax in long term if he decides to withdraw the fund. Is there any way I can transfer the person's coin if I create a wallet in his name and not affect my CGT? Is there a better way for this?

Cheers! 

[1714180581]

1714180581

[1714180581]

1714180581

[1714180581]

1714180581

[fiulpro]

Because my family member gave me cash, I made a purchase in my name so I am holding the coin for that person. The problem is, it will affect my capital gains tax in long term if he decides to withdraw the fund. Is there any way I can transfer the person's coin if I create a wallet in his name and not affect my CGT? Is there a better way for this?

Cheers!  

Hello
The moment you brought the coins in your name you would be taken as the owner ofcourse. It does not matter if it was for some other person. You have to understand the fact that you cannot register cash anywhere, it's impossible to make any governmental authority to understand the situation here.
There is nothing that you can do. Only thing you can do is to ask the person to pay the equivalent amount of tax which would go with the amount of bitcoins you are holding for him according to the governmental body. Right now I think you should stop doing it. If it's a significant amount then you can have a lot of problems.
Don't do that in the future. Make sure to help others but maybe they could make the wallets and you can help them in buying ? But don't buy in your name since now every good exchange have KYC and is connected to the bank account.
If you transfer the coin it would be taken as a trade and nothing else. You are liable to be taken responsible for it too.

[tinopener]

Because my family member gave me cash, I made a purchase in my name so I am holding the coin for that person. The problem is, it will affect my capital gains tax in long term if he decides to withdraw the fund. Is there any way I can transfer the person's coin if I create a wallet in his name and not affect my CGT? Is there a better way for this?

Cheers! 

This ideally is a question for a qualified accountant, at least if the amount of money merits it.

If you are in the UK, I can recommend one by private message.

[Tstar]

Because my family member gave me cash, I made a purchase in my name so I am holding the coin for that person. The problem is, it will affect my capital gains tax in long term if he decides to withdraw the fund. Is there any way I can transfer the person's coin if I create a wallet in his name and not affect my CGT? Is there a better way for this?

Cheers!  

Ask a professional tax adviser, best licensed.

Some countries are allowing to donate the coins, but the person who receives it will have to pay taxes over the whole amount, not just the difference of buy-sell price.

[figmentofmyass]

Because my family member gave me cash, I made a purchase in my name so I am holding the coin for that person. The problem is, it will affect my capital gains tax in long term if he decides to withdraw the fund. Is there any way I can transfer the person's coin if I create a wallet in his name and not affect my CGT? Is there a better way for this?

Cheers! 

what is your tax jurisdiction/where do you live? it makes a big difference.

when you say "in your name" i assume you mean you bought on an exchange---gave your ID information and all that?

in most cases, there has been no taxable event until the coins are sold. so if you just withdraw the coins to your family member's external wallet and relinquish control, the issue can probably be ignored and you can both go on your merry way. if you want to be especially careful, you two could write up a memorandum detailing the agreement you had, in case the tax office ever comes knocking.

i strongly recommend you avoid this in the future, and i especially recommend against selling someone else's coins through your own exchange account. all of their taxable activity will be linked to you, and if you live somewhere like the USA or EU, the tax office may find out about it. it'll be a big mess trying to separate your activity from the other party's, and proving everything.

in the future, they should just handle it themselves through their own exchange or broker account.

[Sternbinder]

Perhaps in this case you should consult a lawyer, I see no other legal and normal way to resolve this issue with the least losses. But I agree that you should not agree to any dubious approaches and solutions, it rarely leads to anything good. And what if then you lose your money and opportunities altogether? Nope, that shouldn't happen.
And don't be afraid of any associated costs.It's okay, but when you do everything according to current laws and regulations, you can count on all transactions being protected and you'll definitely be as safe as possible.
I hope you can resolve your issue soon after all. Write back later about what you were able to do.

[Shakazs]

In general, I think it is absolutely normal to have a tax on our activities, because this is the same business as any other and there can definitely be quite large financial transactions and making impressive profits. Yes, as in any other business, it all starts with your money. But it still has to be regulated in some way. At the end of the day, even if you run into some fraud or problems, you'll definitely want help and support. So I definitely wouldn't try to go around the system in any way, because it could be wrong and it could be illegal, and that's definitely not something that would be a good decision for an honest person and a businessman.

[aoluain]

as per @figmentofmyass TAX liabilities vary from country to country.

I am live in the EU and my country imposes 33% capital gains TAX.

Germany, Portugal, Slovenia and Malta in the EU have no TAX what so ever on Crypto.

Check out > https://decrypt.co/43513/10-countries-that-dont-tax-bitcoin-gains?amp=1

[Silberman]

Because my family member gave me cash, I made a purchase in my name so I am holding the coin for that person. The problem is, it will affect my capital gains tax in long term if he decides to withdraw the fund. Is there any way I can transfer the person's coin if I create a wallet in his name and not affect my CGT? Is there a better way for this?

Cheers!  

Hello
The moment you brought the coins in your name you would be taken as the owner ofcourse. It does not matter if it was for some other person. You have to understand the fact that you cannot register cash anywhere, it's impossible to make any governmental authority to understand the situation here.
There is nothing that you can do. Only thing you can do is to ask the person to pay the equivalent amount of tax which would go with the amount of bitcoins you are holding for him according to the governmental body. Right now I think you should stop doing it. If it's a significant amount then you can have a lot of problems.
Don't do that in the future. Make sure to help others but maybe they could make the wallets and you can help them in buying ? But don't buy in your name since now every good exchange have KYC and is connected to the bank account.
If you transfer the coin it would be taken as a trade and nothing else. You are liable to be taken responsible for it too.

I think this is the correct answer, the moment that you bought those coins in an account that has your name in it then when it comes to the law those are your coins, and if you happen to sell then you are going to be the one that needs to pay those taxes, however depending on the jurisdiction the longer you hold those coins the lesser the amount that you need to pay and there is even a chance that if you hold long enough you do not have to pay taxes, however if you happen to sell and you indeed need to pay taxes then you need to tell that to the person that is the rightful owner of those coins so he can pay those taxes for you.

[EdgeoftheContinent]

I would consult a tax professional as they would be able to more appropriately help you

[xcaret]

If the guy put you on the hook ( he must have thought the value would increase) what is he saying now ??

If he has the attitude that it's your problem, I see 2 options for you. first one is pay an accountant to come up with a figure you will be assessed on tax day, sell the bit coin for cash, deduct the fee the accountant charged you, deduct the amount, in taxes you will be paying ,and give your (ex?) friend the balance.

If it were me I'd ask myself , How much money is this guys friendship worth to me ? This is option number 2, then I'd ask myself what would I like to buy myself if this money were to become mine .

If this family member doesn't care to pay what he /she is going to cost you , then what do they expect you to do? take the loss yourself? If that's the case ,it won't be the first fight that they have caused in the family by their greed. The family wont turn on you knowing what this person has done before .

Anyway you have no problem at all, the family member has the problem.  
Remember the golden rule HE WHO HIOLDS THE GOKLD ,MAKES THE RULES !      
 

  

[CreativeCoin]

Many are now baffled by this topic related to cryptocurrency taxes, and many who use cryptocurrency innovations such as payments for various daily services complain about it because they are usually charged that way. For example, if you buy coffee or eat in a restaurant and pay with a cryptocurrency like BTC, the percentage of that will be almost the same as the payment itself. Now there are many innovations and troubles with cryptocurrency, and it is simply unrealistic to quickly solve them. You must grind and look for ways out of this situation.

[skpanchal]

The extended deadline for filing income tax returns without inviting late penalty is fast approaching on 10 January 2021. As per the provisions of the Income-Tax Act, individuals having income of more than ₹2.5 lakh have to file income tax returns (ITR).

[Lorence.xD]

Ask a professional tax adviser, best licensed.

Some countries are allowing to donate the coins, but the person who receives it will have to pay taxes over the whole amount, not just the difference of buy-sell price.

Wouldn't the one who purchased the coins will be the one that pays the taxes? I saw an interview about Mr. Beast and his crazy tax life, he always pays for all the money that he gives to other people. Or is there a possibility that the person that receives the coin can vouch for paying the taxes? Genuinely curious, I want to know how this tax works because this thing is not taught in school, at least in my school.

[seramania]

looks like crypto tax only applies in your country. in my country there is no crypto tax at all so on behalf of anyone it will be safe and there is no policy of having to pay taxes. Maybe you have to pay taxes if that is the regulation in your country

[Daniel91]

as per @figmentofmyass TAX liabilities vary from country to country.

I am live in the EU and my country imposes 33% capital gains TAX.

Germany, Portugal, Slovenia and Malta in the EU have no TAX what so ever on Crypto.

Check out > https://decrypt.co/43513/10-countries-that-dont-tax-bitcoin-gains?amp=1

I also live in the EU, in Croatia, and unfortunately we have a crypto tax and it's 12%.
In fact, I am surprised that the EU has not already adopted equal regulation for all countries on this issue.
It's always best for all tax uncertainties to check directly with your local tax office.