Topic: Do I pay taxes when I sell an alt coin for bitcoin? - page 6. (Read 19340 times)

Lots of other people in this thread have covered this ... But I will just add my two cents:

I would assume, based upon your post, that you live in the United States. In the United States, you are only required to pay taxes on investments (cryptocurrency is considered an investment) when they are "cashed out" ... If you sell your cryptocurrency for fiat (ie. USD) and the value exceeds the "extra income" threshold, it needs to be claimed as "extra income" on your taxes. If you are dealing with values LESS THAN $1,500, I wouldn't worry about it. Also, there is no need to report anything on your taxes when trading one crypto for another -- or if you are holding an "estimated value" worth of cryptos in a virtual wallet. As far as the IRS is concerned, it doesn't exist until it is turned into fiat.

I am not aware of any US based exchanges that refuse to report their statements to the IRS. You can bet your bottom dollar if you sell your cryptos and send $50,000 to your bank account, and don't claim it on your taxes, you will be audited and most likely charged for tax fraud/evasion. Even if they don't catch you immediately, they could very well catch you 2, 3, 4, even 10 years later. You will still be responsible for all those unpaid taxes. If/when you are audited, I guarantee your bank won't be on your side, Coinbase (or whatever exchange you use) won't be on your side -- all of those entities will turn into big giant buses that will continually run you over

Better safe than sorry. If you sell it for fiat, you need to report it (anything over $1500-2000/yr).

Everyone just need to answer one question..

ARE YOU TOO RICH TO GO TO PRISON.. ? If not don't do it.. pay your taxes if your taxman is asking.

You do not need to pay tax. Well, actually, no one knows and cares about do you pay tax or not because the government, in general, can not trace you because the anonymity that the crytpcourrency has given to us. DOnt worry, just buy coins and hold.s

There's definitely no problem until the figured out that you have avoided the taxes and trying to arrest you soon. It's better to always report your earning each month to the government.
I prefer to lose 10% of my earning rather than get arrested for years.  By the way, not only btc to fiat which is taxed, but any cryptocurrency to fiat which makes you earn additional earning.

No, you do not have to pay tax but you have to pay for the fee. I believe that miner and exchange will take a small fee from your activity. Even retail sellers have some fee too. You do not have to pay tax by using cryptocurrency because they help you to hide your identity. If you want to be a good citizen, you can pay the tax to the government.

yes you have a provision regarding selling of crypto currencies and it should be fall under capital gains tax whether short term or long term depending on how long you are holding your capital asset.

In the US I would say 100% YES YES YES. Don't mess with uncle sam. That would be the last thing you want to get caught for. An offshore account won't save you!

In my country we dont pay taxes for withdrawing bitcoin's and i think in a most countries still not regulated process, because of complicated and variative methods of withdrawing bitcoin, but i think in couple of countries this process regulated or included as a tax when you withdrawing from card

I really don't know cryptocurrencies are getting taxed in most countries.
In my country they don't even follow it. It is not regulated. I guess US citizens are getting taxed?

When you are trading Bitcoins or digital currencies on an exchange, each sell order must be included in your capital gains calculations, even if you never withdrew the dollars to your own bank account.
If you received USD, another foreign currency, or even another digital currency, you have potential capital gains/losses. This includes any trading to other digital currencies, for example, buying ETH with BTC.

As others are indicating, that depends on your domicile. If you are based in the US I am unfortunately not able to help you further.

Well I think there is no tax when you trade between coins but there are fees in each trade so it totally depends on which trading site you are in and how much are their fees. I haven't also tried on cashing out coins as USD and I'm sure some people have already did that but I do think there is a tax when you cash it out, probably because they its a real currency that you are converting that's why there is tax but in bitcoin or altcoins is not a currency that the government approves yet but soon if the government touches bitcoin and altcoin surely, there will be taxes on it too.

Even if it is unclear at the moment, the final answer will probably be "no" for most countries. It is only up to the point you cash out to fiat that you will be exposed to tax. Or, even if your bitcoins are taxed, states will soon draw up anti double taxation laws to make it fair and prevent evasion. Australia, for example, is the latest to pass this law. So you're taxed once, and that is it.

It only useful when exchanger public their services and want to pay taxes fee. But in the fact, no one wants that, haha. Simply I will ask you: "Would you like to pay the taxes fee when you using cryptocurrecies?"

Making cashout transaction there will be the time or let say that it can be have a tax and on the case of selling altcoin to btc i dont think that it may now been taxed in cash out i am not totally sure if can be called tax or just a fee.

but i dont think its a taxes. its a profit for web host. there might be a taxes for bitcoin we earn when more regulation come up.

When they can't find out i don't see a problem , btc to fiat you have to pay.

Taxes are different by country but at least where I'm at I interpret it as only needing to pay once its cashed to fiat.

This is such a broad question though and I wish there was a website out there showing the exact tax rules by country for crypto trading.

Taxation is a major earning every government gets, but for the trading needs there is very minimal taxation. Few countries doesn't have taxes and transaction fee or the trading commission charged by the exchange is the one that the traders pay.

I feel there should be need for further explanation on the IRS form in the sense that for merely selling on an exchange and making profit based on the spirit of fairness in tax should not be taxed because the amount is used to purchased another set of coins but if the sale and profit is being withdrawn, then that is when tax is due.