Topic: Crypto taxes (Read 209 times)

Thanks for the info. Definitely makes it even more expensive if the exchange you trade in is separate from the exchange you cash out in local currency. I've bought credits using the fiat in my local exchange, so far there seem to be no regulation regarding that.

AFAIK yes, only when you withdraw the FIAT funds.
 
But if you buy goods & services with crypto, i don't know if they take into account the value of what you purchased.

I don't do taxes so this is confusing a bit but don't you only get taxed if the money goes out of the exchange? Like it wouldn't still be considered "income" if you traded the crypto back to fiat for profit if you haven't taken it out of that exchange's wallet yet?

uk authorities have brexited the broad masses while they themselves aquired themselves eu citizenships

The UK tax authorities use the same system for personal tax or capital gains tax whether the income is sourced from buying/selling crypto or from selling shares on the stock exchange. I did not know this was being discussed on a big scale in governmental agencies.

In the USA, Britain, Canada and Australia (there are other countries, as well), essentially all government taxes are owed by voluntary agreement or contract.

In the USA, IRS taxes are by agreement. The agreement for standard employees is Form-W4 or some variant of the 1049 Form. Fill out forms "n-a" on all lines (except name, address, SSN), and sign them "non-assumpsit, By: "your sig., Agent."

If anybody formally objects by stealing your money property anyway, sue that man/woman man to man for stealing your property. Sue him/her in common law court of record, unrepresented, as a wrongdoer.

If you think that there is a former form you signed that is hindering you, rescind your signatures off all docs by sending a letter to the appropriate agency stating that you rescind your signature.

If the IRS doesn't do as you require, sue their head person of whatever branch is stealing your property. Or, sue the Commissioner of the Internal Revenue in his/her private capacity, as a man or woman... give him/her notice, first.

If the crypto exchange steals your money for taxes, sue the head(s) in their private capacity.

Youtube search on Karl Lentz common law to find out how.

Well yes, but this is all assuming that you have some sort of stable job. For most people, getting involved in Crypto should be something that they do on the side and they shouldn't be dumping enough money to bankrupt them when their tax return comes around.

The people who got fucked were people who continues to buy and sell Bitcoin as it ran up in price, problem was that these people never took their gains. I'll give you an example of this:

Bob had bought $10000 in Bitcoin when Bitcoin was worth 1000, which means that Bob bought 10 bitcoins. When Bitcoin went to 10000 per coin he sold it all, great for Bob. Bob didn't even have to wait that long for the run up to happen, this all happened in the span of one year and Bob sold his Bitcoins in December right before the year ended so he could buy some Christmas presents. Right now, Bob has made $90,0000 in profit (disregarding transaction fees, etc). Due to Short term capital gains laws in the US, Bob has to pay 12 percent tax on this, which equals abut $10,800 for the US government. Not too bad for them, they made some good money.

But the problem is that Bob later bought 90,000 worth of Bitcoin at 20000 after the year ended. This means that Bob bought 4.5 Bitcoins, which he then sold when it went down to 3,000 in this situation Bob has now lost 76,500. He is now left with about $13,500

The problem presents itself when Bob notices how the taxable situation works. When it comes to calculating any sort of taxes, Dec 31 is the ending part of the year. That's when you should set aside 10,800 (from before when he made money) and say this is the money that will be used to pay taxes. Bob is left with 13,500 in USD and owes the US government $10,800 from last year.

Yes he can carry forward the loss that he has from before, but it won't affect his prior year return.

After paying his taxes, Bob is left with $13,500-$10,800= $2,700 from his gains. He's also left with $76,500 in losses that he'll be carrying forward on his return for 25.5 years (unless he offsets other gains with this money) Don't be Bob, set aside money for tax time and take sometime to understand the tax law.

If anyone has any questions about Crypto tax, I'm more then willing to explain things.

That only works if you have an income for that year. They aren't going to pay you back if you earn 0. They are only able to lower the tax due for the year, so if you have a job and your trading loses you money, you're fine, as long as the loss is greater than your wage. If it's not, the government couldn't care less. They will tell you to sell your property or take a loan

If you are UK based , here’s the latest guidelines from the HMRC

https://www.gov.uk/government/publications/tax-on-cryptoassets/cryptoassets-for-individuals

Thanks, your answer was almost exhaustive.

@kro55 Sure? Usually the taxes are percentages, not fixed amounts. https://www.nerdwallet.com/blog/taxes/capital-gains-tax-rates/

Since long-term crypto traders IMO are going to make very high capital gains, they are also going to pay huge taxes in most countries, if they don't hide their crypto.

But the fact it is a sure win, is my personal belief of course

I don't think you guys understand how capital gains taxes work. This isn't new, and this isn't something which is just present in the crypto world. Every single market where trading occurs - Stocks, Bonds, Real Estate, Commodities, Forex, etc are all subject to capital gains taxes.

If you buy something at 100 and sell it at 1000 within a few weeks, then you're going to be subject to short term capital gains.
If you buy something at 100 and sell it at 1000 after a year of holding it, then you're going to be subject to long term capital gains.

Short term is going to be the most expensive, tax wise, of these two. These capital gains are also reliant on your income bracket.

But to address your question, as it revolves around 'what if I lose money, does the government pay me' Well kinda.

If you buy something and then sell it as a loss, you're able to 'take a loss' on your tax return and use the loss to lower your income for the year (you can only take a loss of 3000 per year on your return, so if need be you'll continue to carry forward your loss until you've exhausted it) So yes, the government does in a way compensate you for your losses.

Don't think that capital gains is just present in crypto. This is present everywhere.

I am really not into trading but with Forex traders and other markets pay taxes on their profits, then it shouldn't be a problem when crypto traders also pay taxes as well.

AFAIK, government has a fixed amount of tax that doesnt increase in case you earn heavy profit or just a minor profit and same for your loss. Government never spares anyone from tax, its not in your country its every where in the world. we have to bear this.

https://blockonomi.com/hmrc-crypto-tax-evaders/
UK’s tax agency HMRC is pushing for crypto investors to pay taxes on their revenue... of course, in case the investment goes well and profit has been made.

But i'm asking myself: what happen if the investment goes badly?
They are not going to pay taxes back to me if i lose money.

They are villains.
You are the one taking the risk, and you deserve to keep all your hard earned profits.

The gov did not help you make profit, it was 100% by your own intellect and risk , so why should you give them a piece of your cake?

I may accept such a steal if they at least pay me part of my losses in case my investment was bad...

My forecast for the 2020:
because of increasing regulation/taxes on crypto, the privacy coins will grow significantly both in price and adoption, since they are the only ones able to hide your finances from the transaction tracking tools used by the gov.

Even Litecoin may grow in value, if their privacy improvements are implemented well.

Or maybe the people will stick to BTC, and then they'll pretend an hacker stole their coins. Who knows