Taxes when selling physical coins?

[tinerd]

Hi there,

I am new here so pardon my ignorance. I did some searching but didn't manage to find an answer. What are the tax implications of selling a physical coin on here? Is it different whether you receive cash vs BTC?

Thank you in advance.

[RickDeckard]

This mostly depends on the way that crypto is taxed in your own country. If capital gains on crypto aren't taxable by law, then you should consider accepting payments on crypto since you won't have to pay any tax on it.

If, on the other hand, you sell something or fiat then, it theory, you should report any gain capital gain you had since you did, in fact, made a sell (being trought the internet or in a store actually doesn't matter).

I do know, however, that people tend not to disclosure gains from selling on the Facebook Marketplace (I know a few cases) but they could get in trouble if they do that for a living and start having a larger income than the one that they "supposedly" should be having.

Short answer : If crypto isn't taxed in your country take advantage of it and accept the payment as BTC.

[Welsh]

Depends on the country. However, you probably do have to pay some sort of tax on it. Most countries to my knowledge would require you to submit a self assessment, or country equivalent, and report it as income tax. This all depends if you are in the bracket in the first place, which requires submitting your yearly income. If you bought the coin, then you can deduct the price you paid for it, from the amount you sell it for. This doesn't matter if its in BTC or cash. You'll have to find out how much it was worth in fiat at the time.

If in doubt, you can contact an accountant, and they should be able to offer advice. Some are willing to answer these sort of questions in a consultation so you can still submit the documents yourself if you wanted too.

[tinerd]

Ah, of course. I feel so American for not specifying the country. But this is super helpful and gives me enough info to go off of.

Appreciate it!

[hd49728]

What are the tax implications of selling a physical coin on here?

Physical coins? In crypto market, you have digitalized coins or tokens, not physical.

Depends on your nation, you have to obey with your national rule on tax. Generally, if you end with profit, you need to pay tax for governments.
[Tutorial] Crypto taxes for beginners

[UserU]

Physical coins? In crypto market, you have digitalized coins or tokens, not physical.

Depends on your nation, you have to obey with your national rule on tax. Generally, if you end with profit, you need to pay tax for governments.
[Tutorial] Crypto taxes for beginners

I think what OP meant was those ancient coins (tens or hundred years old kind). Collectors item.

If it's BTC, most likely it's gonna be taxed since you have to declare the profits or losses as cryptos are treated as personal assets:

Cryptocurrencies are treated as personal property (not currency) and are therefore taxed as capital assets.
Capital gains from selling cryptocurrency for fiat currency (e.g. USD) or using cryptocurrency to purchase goods or services are subject to capital gains tax

Source: https://www.irs.gov/pub/irs-drop/n-14-21.pdf

[Theb]

Physical coins? In crypto market, you have digitalized coins or tokens, not physical.

Depends on your nation, you have to obey with your national rule on tax. Generally, if you end with profit, you need to pay tax for governments.
[Tutorial] Crypto taxes for beginners

I think what OP meant was those ancient coins (tens or hundred years old kind). Collectors item.

Nope judging by the OP's post history I think when he is saying "physical coin" he is talking about the Casascius Physical Bitcoin he have purchased which makes sense on why he will be confused on the tax implications on it. Basically @OP you have 2 things to consider when you will be selling back this Casascius again the income you will get from the sale and also the capital gains you will have assuming that the Casascius physical Bitcoin you have is not empty. The income is of course the selling price you have sold it minus the purchase price when you have bought it and also minus the market value of the Bitcoin inside it that will be considered as your income. While the capital gains you need to conisder is similar to that but you need to take account the market value of Bitcoin when you have purchased it and also the market value of Bitcoin when you will sell it. Remember that Income tax and also Capital gains tax fit in this criteria since this is not only the digital asset we need to consider but also a physical item that you have bought.

[odolvlobo]

What are the tax implications of selling a physical coin on here? Is it different whether you receive cash vs BTC?

Assuming you are in the U.S., it is not complicated. It is property so you report it as capital gains. The gain is the difference between the price you sold it for (in dollars at the time of the sale) and the price you bought it for (in dollars at the time of the purchase).

For example, if you bought it for 1.05 BTC on 2012/01/03 (I think that was his price), you paid the equivalent of $6. If you sold it today for 1.1 BTC, you sold it for the equivalent of $57,200. You pay capital gains tax on a gain of $57,194.

[UserU]

Nope judging by the OP's post history I think when he is saying "physical coin" he is talking about the Casascius Physical Bitcoin he have purchased which makes sense on why he will be confused on the tax implications on it. Basically @OP you have 2 things to consider when you will be selling back this Casascius again the income you will get from the sale and also the capital gains you will have assuming that the Casascius physical Bitcoin you have is not empty. The income is of course the selling price you have sold it minus the purchase price when you have bought it and also minus the market value of the Bitcoin inside it that will be considered as your income. While the capital gains you need to conisder is similar to that but you need to take account the market value of Bitcoin when you have purchased it and also the market value of Bitcoin when you will sell it. Remember that Income tax and also Capital gains tax fit in this criteria since this is not only the digital asset we need to consider but also a physical item that you have bought.

I see, my bad then!

[PrimeNumber7]

Is it different whether you receive cash vs BTC?

What are the tax implications of selling a physical coin on here? Is it different whether you receive cash vs BTC?

Assuming you are in the U.S., it is not complicated. It is property so you report it as capital gains. The gain is the difference between the price you sold it for (in dollars at the time of the sale) and the price you bought it for (in dollars at the time of the purchase).

For example, if you bought it for 1.05 BTC on 2012/01/03 (I think that was his price), you paid the equivalent of $6. If you sold it today for 1.1 BTC, you sold it for the equivalent of $57,200. You pay capital gains tax on a gain of $57,194.

If the OP were to receive BTC as part of the transaction, the cost basis of the BTC the OP receives would be $57,200 (in your example), and the OP would need to account for any gain or loss when he sells the BTC for USD (or an altcoin), presumably in part to fund the payment of his tax liability. If he receives USD, he would only need to pay taxes on the gain from the sale of his coin.

Considering the amounts of money involved, it would probably be best if the OP were to consult with a tax professional familiar with his specific tax and financial situation. There are many nuances in tax law.