Here is some recent research on the situation with crypto taxes in different countries https://oneart.digital/en/blog/payments-taxes-tax-havens-your-crypto-regulation-guide 
Topic: ㅤ (Read 907 times)
Haven't updated the topic of crypto taxation for a long time. During this time, interesting guides have appeared:
- The Ultimate Crypto Tax Guide (2021)
- Cryptocurrency Tax Rates (Find Out Yours)
- Cryptocurrency & Bitcoin Tax Guide (2021 Edition)
- Here’s How to Report Virtual Currency to the IRS
- How Are NFT’s Taxed?
- The Tax Implications of ETH 2.0
- IRS Is Hunting Down Kraken and Circle Customer Information
- Coinbase to Stop Reporting Form 1099-K to IRS and Customers
- IRS Updates Guidance on 1040 Cryptocurrency Question
- The Ultimate Crypto Tax Guide (2021)
- Cryptocurrency Tax Rates (Find Out Yours)
- Cryptocurrency & Bitcoin Tax Guide (2021 Edition)
- Here’s How to Report Virtual Currency to the IRS
- How Are NFT’s Taxed?
- The Tax Implications of ETH 2.0
- IRS Is Hunting Down Kraken and Circle Customer Information
- Coinbase to Stop Reporting Form 1099-K to IRS and Customers
- IRS Updates Guidance on 1040 Cryptocurrency Question
Found another interesting topic regarding IRS notice CP2000 for cryptocurrency.
Such notifications are sent to those who have found income that is not indicated in the tax return.
You can get acquainted here:
- https://cryptotrader.tax/blog/irs-notice-cp2000-for-cryptocurrency
- https://www.irs.gov/individuals/understanding-your-cp2000-notice
- https://medium.com/the-capital/irs-notice-cp2501-and-cp2000-for-cryptocurrency-traders-5a0dd2f49f9b
- https://www.cryptoknowmics.com/news/irs-sends-cp2000-notices-as-warning-to-crypto-investors/
Such notifications are sent to those who have found income that is not indicated in the tax return.
You can get acquainted here:
- https://cryptotrader.tax/blog/irs-notice-cp2000-for-cryptocurrency
- https://www.irs.gov/individuals/understanding-your-cp2000-notice
- https://medium.com/the-capital/irs-notice-cp2501-and-cp2000-for-cryptocurrency-traders-5a0dd2f49f9b
- https://www.cryptoknowmics.com/news/irs-sends-cp2000-notices-as-warning-to-crypto-investors/
Who Needs To Answer “Yes” To 1040 Cryptocurrency Tax Question
Last year, the IRS introduced a Virtual Currency Tax Question into US tax forms, particularly in Schedule 1 1040. The virtual currency tax question was moved to the forefront of Form 1040, the main US income tax form.
Quote
The question reads:
“At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”
“At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”
The question is not clear to everyone, in which case it is necessary to answer YES. If you bought bitcoin in 2018 and kept it intact all year long without participating in any transactions, be it exchange, trade, sale, you need to answer YES? Since October 2020, the tax office has added instructions under which situations you need to answer YES to the question of Virtual Currency Tax Question.
The official manual was released: 2020 1040 Guidance. And here's what it says about this question:
Quote
If, in 2020, you engaged in any transaction involving virtual currency, check the “Yes” box next to the question on virtual currency on page 1 of Form 1040.
A transaction involving virtual currency includes:
- The receipt or transfer of virtual currency for free (without providing any consideration), including from an airdrop or hard fork;
- An exchange of virtual currency for goods or services;
- A sale of virtual currency; and
- An exchange of virtual currency for other property, including for another virtual currency
At the same time, a transaction involving virtual currency does not include the holding of virtual currency in a wallet or account, or the transfer of virtual currency from one wallet you own or control to another that you own or control.
A transaction involving virtual currency includes:
- The receipt or transfer of virtual currency for free (without providing any consideration), including from an airdrop or hard fork;
- An exchange of virtual currency for goods or services;
- A sale of virtual currency; and
- An exchange of virtual currency for other property, including for another virtual currency
At the same time, a transaction involving virtual currency does not include the holding of virtual currency in a wallet or account, or the transfer of virtual currency from one wallet you own or control to another that you own or control.
That is, you need to answer YES in cases where you have made some kind of taxable operation and received a crypto profit.
sources:
- https://www.irs.gov/pub/irs-dft/i1040gi--dft.pdf
- https://cryptotrader.tax/blog/irs-clarifies-1040-cryptocurrency-tax-question
It would be great if you could add information about the crypto tax in Croatia in your introductory post.
It seems to me that you already have enough information about it
It seems to me that you already have enough information about it
Yes, I remember, I am going to add a list of countries with crypto tax information to the Table of contents. For now I am in the process of collecting information.
It would be great if you could add information about the crypto tax in Croatia in your introductory post.
It seems to me that you already have enough information about it
It seems to me that you already have enough information about it
Yes, I remember, I am going to add a list of countries with crypto tax information to the Table of contents. For now I am in the process of collecting information.
Can you add crypto tax info from Croatia to the Table of contents now?
I think some people will be gratefull for such info.
Thank you for your great work and effort to collect all this info.
Info on Taxes
I want to write a little about Taxes, because there will be questions and issues that arise as we begin the Punic Wax Network and we will likely need and FAQ, but this is also useful for Bitcoiners or any Coiners.
I run a Tax Exempt Religious Organization, we have a Federal Employer ID Number (FEIN), and a Ruling Letter, as well as an IRS approval to not withhold Social Security Taxes to pay Employees, further we can bring other organizations under us. We also will have any Employees and those Spreading the Religion file for their Self-Employment Religious Tax Exemption (IRS form 4367 or 4361).
But,
That does not make everything Tax Exempt, so I am going to get into a little about Religious Taxes, intertwined with Crypto Taxes.
The Reverend or Minister will often build his house on a Church Property because Religious Organizations are exempt from Property Taxes, but if the Minister or Reverend, etc, buys a House not on Church Property, a Property not used for Religious purposes, it is not exempt. You could have a House with a Bible study Room, or Altar, or otherwise intended for Religious use, and then you start getting into Grey Areas. In the Religious Land Use and Institutionalized Persons Act (RLUIPA) we see that Religion can build structures outside of Home Owners Association (HOA) regulations, etc. So, a good Rule of Thumb would be that if you have a Religious Land Use instance that is constant, then you would probably qualify as a Tax Exempt property of the Church. You can then see this same type of Qualifier for Taxes. If you are Earning and Spending Crypto in a Capacity in which you are creating Religious Materials (Literature, Art, etc) you are likely qualified to get Tax Exemption on your earnings.
Cryptocurrency can be seen in the Work of Art part of Tax Law. If you write a Song, someone else can own it, you can Buy it or Sell it, it may be valued at $5,000,000 but you only pay Taxes when you sell or earn. Cryptocurrency is a line of Code, like a Video Game Token, it only has the Value we give it collectively based on our appreciation of the unerrorability of the Blockchain technology, but as far as the Tax Code, it is like a Music Book, or a Song on the Radio. The Government gets their part, when you Earn. When you have Income.
The IRS has said a few different things regarding Bitcoin, and if you want to be real safe you can pay Capital Gains Taxes on your Bitcoin, or other Currencies Explicity mentioned by the IRS, but most Altcoins and really an Altcoin you make yourself is not something to worry about, and the IRS is just writing Rules in place of a True Rule created by the Court. Because there just has not been a Case where like someone like me was involved. And most cases are about people paying 0 Taxes.
Spend Coins on a Car to Drive to Friends Houses and the Bar = Pay Taxes at Cashout
Spend Coins on a Car used for Religious Business Materials Transportation for Production and Shipping = No Taxes
Earn Coins Day Trading Currencies and cashing out to your personal Bank Account, used by yourself for Entertainment spending, Vacationing, etc = Pay Taxes at Cashout
Earn Coins writing Religious Literature to then spend feeding those who keep the Religion alive and spread it throughout the World = No Taxes
I run a Tax Exempt Religious Organization, we have a Federal Employer ID Number (FEIN), and a Ruling Letter, as well as an IRS approval to not withhold Social Security Taxes to pay Employees, further we can bring other organizations under us. We also will have any Employees and those Spreading the Religion file for their Self-Employment Religious Tax Exemption (IRS form 4367 or 4361).
But,
That does not make everything Tax Exempt, so I am going to get into a little about Religious Taxes, intertwined with Crypto Taxes.
The Reverend or Minister will often build his house on a Church Property because Religious Organizations are exempt from Property Taxes, but if the Minister or Reverend, etc, buys a House not on Church Property, a Property not used for Religious purposes, it is not exempt. You could have a House with a Bible study Room, or Altar, or otherwise intended for Religious use, and then you start getting into Grey Areas. In the Religious Land Use and Institutionalized Persons Act (RLUIPA) we see that Religion can build structures outside of Home Owners Association (HOA) regulations, etc. So, a good Rule of Thumb would be that if you have a Religious Land Use instance that is constant, then you would probably qualify as a Tax Exempt property of the Church. You can then see this same type of Qualifier for Taxes. If you are Earning and Spending Crypto in a Capacity in which you are creating Religious Materials (Literature, Art, etc) you are likely qualified to get Tax Exemption on your earnings.
Cryptocurrency can be seen in the Work of Art part of Tax Law. If you write a Song, someone else can own it, you can Buy it or Sell it, it may be valued at $5,000,000 but you only pay Taxes when you sell or earn. Cryptocurrency is a line of Code, like a Video Game Token, it only has the Value we give it collectively based on our appreciation of the unerrorability of the Blockchain technology, but as far as the Tax Code, it is like a Music Book, or a Song on the Radio. The Government gets their part, when you Earn. When you have Income.
The IRS has said a few different things regarding Bitcoin, and if you want to be real safe you can pay Capital Gains Taxes on your Bitcoin, or other Currencies Explicity mentioned by the IRS, but most Altcoins and really an Altcoin you make yourself is not something to worry about, and the IRS is just writing Rules in place of a True Rule created by the Court. Because there just has not been a Case where like someone like me was involved. And most cases are about people paying 0 Taxes.
Spend Coins on a Car to Drive to Friends Houses and the Bar = Pay Taxes at Cashout
Spend Coins on a Car used for Religious Business Materials Transportation for Production and Shipping = No Taxes
Earn Coins Day Trading Currencies and cashing out to your personal Bank Account, used by yourself for Entertainment spending, Vacationing, etc = Pay Taxes at Cashout
Earn Coins writing Religious Literature to then spend feeding those who keep the Religion alive and spread it throughout the World = No Taxes
Well, seems like PUTI looks a little bit promising and can live to compete with the others altcoin. Then what about your another token, PUCO?
PUCO token should also be like the current PUTI token, or you prefer to raise only one of them, well it will have other story. Also maybe you want to make PUTI bigger first, than after that PUCO token turn will arrive.
PUCO token should also be like the current PUTI token, or you prefer to raise only one of them, well it will have other story. Also maybe you want to make PUTI bigger first, than after that PUCO token turn will arrive.
TRON/Polonidex is afraid to touch this because of the Bitcoin foundation issue, but that is simply a delay. As we ultimately are the ones suing them, they pretend its over.
What we are doing now is creating the PUTI Market, then soon we will start accepting BLURT for PUTI, and HIVE. And we will start accepting PUTI to pay for Soap. Then we will start accepting PUTI, BLURT, STEEM and HIVE for PUCO, and PUCO for Soap, while PUCO gets paid out for Social Media Bounties.
Then and ETH Clone and a HIVE Token, and then several more after that.
But we will do person to person, token to token trades, and Pegged Tokens on Tokens between platforms.
Then Polonidex will list us on their own, I won't need the self listing feature they are refusing to use properly.
The next month a lot is going to happen. Because of the Corona Virus a lot of stuff was postponed, we weren't even on WiFi most of the time but we are now getting everything moving.
We are going to have the Etsy shop up soon, so PUTI, BLURT, STEEM and HIVE for Soap, Oils, etc, will be available within a few weeks.
We are also suing Facebook for attacking my Wife's business, likey to use as the model for their failing idea Libra, which is being renamed "Diem" and stealing my Wife's brand.
And we will have a few more Tokens and our own Blockchain soon, including some Pegged Tokens for cross chain trades.
Our Organization, the Shaivite Temple, is also:
1. Federally 501(c)(3) Tax Exempt and we have a Federal Ruling Letter
2. Exempt from paying Social Security Taxes as a Religious Organization
3. Any Minister doing work related to the Religious Mission, and are part of the Ministry/Order, are exempt from Taxes for earnings in that capacity
Thanks so much for putting this together. It would really be great to have ongoing discussion threads about taxes in various countries. Where questions can be posted and get answered on an ongoing basis by people who are based and have experience in the respective country.
The safest way for you to avoid committing tax fraud is to go to an IRS office in your residing country and inquire about cryptocurrency taxes. This will ensure you retrieve information about what amount to pay taxes on.
Hiring an accountant or tax consultant can save you lot of trouble as they are able to make accurate calculations of your earnings including gains and losses. If you earn and transact crypto assets worth thousands of USD over the year, please don't take this for granted as you maybe in debt at the peak of your retirement. The way crypto is gaining momentum, there will be a time IRS will start coming after crypto users.
Hiring an accountant or tax consultant can save you lot of trouble as they are able to make accurate calculations of your earnings including gains and losses. If you earn and transact crypto assets worth thousands of USD over the year, please don't take this for granted as you maybe in debt at the peak of your retirement. The way crypto is gaining momentum, there will be a time IRS will start coming after crypto users.
Wow, really great and needed article, thanks for making it. I guess it's useful not only for beginners. Though, regulations in every country is different, but it's good stuff to read to at least understand basics. I can say that taxes, especially when we talk about crypto, always been difficult and confusing thing. I agree with post above that would be best to hire accountant if you want to avoid any kind of problems later.
I hope you will also add info about crypto tax in Croatia soon 😁
If you need any help with info, materials, translation etc. Please let me know.
If you need any help with info, materials, translation etc. Please let me know.
I have not forgotten about you and promised to help you. So, managed to find something about tax in your country.
- Tax Treatment of Crypto Currency in Croatia
- Taxes on cryptocurrencies like Bitcoin in Croatia
Great, you are the man!
Can I ask you to add this information to the introductory post for better visibility?
THank you for understanding and support.
Not every beginner is US resident! So most of the information especially calculation and reporting info may not be relevant to every btctalk member. For example, in India, sale of cryptocurrency treated as LTCG if sold after holding period of 3 years instead of one.
However, this is a nice tutorial especially every detail about Capital Gain Tax such as offsetting rule, etc is worthy and I appreciate your efforts.
By the way, I have created Tax Guide for Indians here - https://bitcointalksearch.org/topic/guide-how-bitcoin-and-cryptocurrencies-are-taxed-in-india-5206607 and contains quality discussion about tax implications on various crypto events, especially replies from @teosanru are very handy for someone involved in regular crypto trading in India.
By the way, I think you made typo here:
You meant activities you need not to pay taxes on, right?
However, this is a nice tutorial especially every detail about Capital Gain Tax such as offsetting rule, etc is worthy and I appreciate your efforts.
By the way, I have created Tax Guide for Indians here - https://bitcointalksearch.org/topic/guide-how-bitcoin-and-cryptocurrencies-are-taxed-in-india-5206607 and contains quality discussion about tax implications on various crypto events, especially replies from @teosanru are very handy for someone involved in regular crypto trading in India.
By the way, I think you made typo here:
Not all cryptocurrency engagements attract taxes. Here are the activities you need to pay taxes on:
- When you move your cryptocurrency from one wallet to another or between crypto exchanges.
- Donating cryptocurrency to a non-taxable charity organization
- When you buy crypto with fiat
- When you give cryptocurrency as a gift to a friend or family.
- When you move your cryptocurrency from one wallet to another or between crypto exchanges.
- Donating cryptocurrency to a non-taxable charity organization
- When you buy crypto with fiat
- When you give cryptocurrency as a gift to a friend or family.
You meant activities you need not to pay taxes on, right?
Very good topic. Can you add information on paying crypto taxes in Croatia?
Here is the official opinion of the Croatian Tax Administration on "Tax treatment of capital gains based on cryptocurrency trading":
https://www.porezna-uprava.hr/HR_publikacije/Lists/mislenje33/Display.aspx?id=19570
In short, the tax is paid at the rate of 12%, and then increased by the surtax of the competent municipality / city.
I later came across the interpretation that if crypto funds are kept in the wallet for at least 2 years, and this can be proven to the tax administration, that a complete tax exemption is possible, but it is better to check it first with the competent tax office.
Here is the official opinion of the Croatian Tax Administration on "Tax treatment of capital gains based on cryptocurrency trading":
https://www.porezna-uprava.hr/HR_publikacije/Lists/mislenje33/Display.aspx?id=19570
In short, the tax is paid at the rate of 12%, and then increased by the surtax of the competent municipality / city.
I later came across the interpretation that if crypto funds are kept in the wallet for at least 2 years, and this can be proven to the tax administration, that a complete tax exemption is possible, but it is better to check it first with the competent tax office.
Thank you, I will look at the material and possibly publish a guide on tax in your country in a separate post on this topic.
OK thank you. Unfortunately I couldn't find anything in English about this important topic so you probably only have Google translate left
EDIT: OK I find also something in English what may help (Unfortunately the news is not the latest):
https://www.irglobal.com/article/cripto-currency-taxation-in-croatia
https://bitfalls.com/2018/02/09/croatias-announcement-taxing-cryptocurrency/
Very good topic. Can you add information on paying crypto taxes in Croatia?
Here is the official opinion of the Croatian Tax Administration on "Tax treatment of capital gains based on cryptocurrency trading":
https://www.porezna-uprava.hr/HR_publikacije/Lists/mislenje33/Display.aspx?id=19570
In short, the tax is paid at the rate of 12%, and then increased by the surtax of the competent municipality / city.
I later came across the interpretation that if crypto funds are kept in the wallet for at least 2 years, and this can be proven to the tax administration, that a complete tax exemption is possible, but it is better to check it first with the competent tax office.
Here is the official opinion of the Croatian Tax Administration on "Tax treatment of capital gains based on cryptocurrency trading":
https://www.porezna-uprava.hr/HR_publikacije/Lists/mislenje33/Display.aspx?id=19570
In short, the tax is paid at the rate of 12%, and then increased by the surtax of the competent municipality / city.
I later came across the interpretation that if crypto funds are kept in the wallet for at least 2 years, and this can be proven to the tax administration, that a complete tax exemption is possible, but it is better to check it first with the competent tax office.
Crypto tax will only apply depending on the country you are living. Mostly there is no crypto tax being collected bynthe government unless they wanted cryptocurrency to be part of the system. Here in our place, the government only collect tax on exchange tha has the permit from the government to operate. As a result these exchanges will be the one to deduct from us some sort of tax(but not yet confirm) due to high transaction fee deduction every transaction made. Well, I can't blame the exchanges for this because this is the way that they can operate by paying the permit and collecting value added tax to the consumers to be forward from the government.
When it comes to finances, and especially taxes I would recommend an accountant no matter how small/large you're dealing with. I know that its somewhat frowned upon in certain crowds due to it involving a third party with your finances, something a lot of us as chosen Bitcoin, and other cryptocurrencies for, so we can avoid the reliance on others, and be in total control, but honestly if you aren't familiar with the complex nature of taxes, then an accountant can save you a lot of money, and time. They don't have direct control over your finances, but they will require information on how much you've taken, and spent, but in my opinion the issue of privacy is worth it in this sense since making a mistake on your taxes could result in a heavy fine. I personally, don't understand all of the tax implications, and thus I've got an accountant that does all of my taxes. I've tried to wrap my head around it several times, and there's just so many little bits that trip you up, and to me personally was not worth the time investment to learn everything or stress that it caused to do it myself.
Although, the OP has put out some very good information for those that are residing in the US, and its always good to have a good understanding of the system, and I would encourage anyone to get up to speed on it, but I would still recommend an accountant to actually check, and file the appropriate documents.
Also, if you're concerned about privacy, using the websites linked above are likely more of a target to malicious use than that of an accountant, simply because its a easier target since all the data is kept online.
Although, the OP has put out some very good information for those that are residing in the US, and its always good to have a good understanding of the system, and I would encourage anyone to get up to speed on it, but I would still recommend an accountant to actually check, and file the appropriate documents.
Also, if you're concerned about privacy, using the websites linked above are likely more of a target to malicious use than that of an accountant, simply because its a easier target since all the data is kept online.
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