IRS taxing cryptocurrency trades starting Jan. 1st.

coinplus

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Quote from: CryptoAlphaStar on December 31, 2017, 12:28:37 PM

If I am getting this right, if I invest in a shitcoin, it moons 100x and I sell for bitcoin, I have to pay taxes on the 100x surge? This is an outright steal, because when BTC goes down, all the alts go down.

I am rather seeing the whole tax thing as more like an attack on the usage by the Americans.
I am not sure how they will be able to get this played out, but I am really trying to see how it ends up working. There is a lot that would go on this year with the government as I feel some wars would be declared on crypto, but that would be a war they cannot win. For now, the crypto market looks strong and no taxation can scare people off from using it.

sandy14350

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felling bad for US residents with the silliest law ever. Crypto currencies should not be taxed like this, because they don't really have any definite USD value, and many are not even traded against USD. It is when you actually exchange crypto token to USD, goods or services you know its USD value exactly, and at this moment it should be taxed. How IRS is going to audit day traders?could ever it be possible technically?

easynote

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Quote from: bitgangsta on December 31, 2017, 09:04:37 AM

With the new tax bill recently being passed, it is reported that we will be required to pay tax on all cryptocurrency to cryptocurrency trades. Does anybody know how much tax we would have to pay on trades. How do you even calculate that?

https://townhall.com/columnists/lindsaymarie/2017/12/29/brace-yourselves-cryptocurrency-investors-taxes-are-coming-n2428153

How does this stop you from trading cryptocurrencies on an offshore website instead of a main exchange that is based in the USA?

sycaburatan

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centralization in a decentralized platform?this is ridiculous the U.S citizens are good paying their taxes very well,i am against this regulation.

SCAR_8

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All the more reason to hodl and not pay the steeper income tax rates and wait a year or more and just pay the long term capital gains tax. Which is also based off your normal income but shouldn't be that bad depending on what you already make.

raven7886

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Quote from: QFT on December 31, 2017, 12:51:14 PM

Sounds kind of ridiculous and is most likely going to ruin it for part of the americans.

It is going to ruin it one way but I am not sure how this would all end up. It is insane honestly, and I really do not envy the Americans right now. This is also why the whole idea of having decentralized exchanges would make a lot of sense, but this is something that we may not see for now and will just have to live with the attack on the crypto users and just unfortunate US is first.

I guess that this is a reason to start shifting away from US exchanges. No one knows for now but I am sure it is going to get integrated into the exchange fees somehow and until then, we may not know. It is crazy though as this would bring more like an era where trading fee may start being a huge one but let's see. Whichever way though, I am looking forward to how that is going to play out.

paxmao

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Quote from: bitgangsta on December 31, 2017, 09:57:15 AM

Well the IRS would be US, so it should at least affect the US exchanges.

I would say that it affects only US citizens. I work with US exchanges but I am resident in a different jurisdiction, so IRS has no right to impose taxes on me at all. I hope that they also tax shares and funds.

GayOfThrones

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That's basically terrorism against cryptos, since your revenues in cryptos are already subject to be taxed, so it is not clear what this law would add to the status quo, beyond some additional harassment.

IckyYak22871

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Condolence to US residents with the silliest law ever. Crypto tokens should not be taxed like this, because they don't really have any definite USD value, and many are not even traded against USD. It is when you actually exchange crypto token to USD, goods or services you know its USD value exactly, and at this moment it should be taxed. How IRS is going to audit day traders? This is just not possible technically.

penig

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Quote from: bip76 on January 02, 2018, 10:33:56 AM

Quote from: bitgangsta on December 31, 2017, 09:04:37 AM

With the new tax bill recently being passed, it is reported that we will be required to pay tax on all cryptocurrency to cryptocurrency trades. Does anybody know how much tax we would have to pay on trades. How do you even calculate that?

https://townhall.com/columnists/lindsaymarie/2017/12/29/brace-yourselves-cryptocurrency-investors-taxes-are-coming-n2428153

Governments world over will be looking for ways to tax cryptocurrencies because they are missing out on huge tax revenues, I'm skeptical as to how crypto to crypto would work. I would think the best way to tax would be similar to stocks where profits are only taxed when stocks are liquidated. I guess however that may not work for cryptos as they can be used as a means of payment.

Governments already have a way to tax crypto, using the same mechanisms as stocks. The common understanding that stock profits are only calculated when liquidated appears to be misguided. Apparently if you trade one stock for another (or one asset for another asset) that is also considered a taxable event and taxes due, with the amount based on market value at time of transaction. Look at it this way, governments have had many decades to see and close loopholes with stock and asset trades, they just apply the same rules to bitcoin and no new regulation is required, just some statement that bitcoin is classified as an asset, which they have done across major jurisdictions.

bip76

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Quote from: bitgangsta on December 31, 2017, 09:04:37 AM

With the new tax bill recently being passed, it is reported that we will be required to pay tax on all cryptocurrency to cryptocurrency trades. Does anybody know how much tax we would have to pay on trades. How do you even calculate that?

https://townhall.com/columnists/lindsaymarie/2017/12/29/brace-yourselves-cryptocurrency-investors-taxes-are-coming-n2428153

Governments world over will be looking for ways to tax cryptocurrencies because they are missing out on huge tax revenues, I'm skeptical as to how crypto to crypto would work. I would think the best way to tax would be similar to stocks where profits are only taxed when stocks are liquidated. I guess however that may not work for cryptos as they can be used as a means of payment.

sp_skeptic

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I have argued previously that crypto to crypto trades are taxable and now it is law. However I think that this means that the IRS will probably not challenge like kind transactions for tax years prior to 2018. So now I plan to claim like kind for 2017 which will save me a lot. If you do this you must file IRS form 8824 though!

Ix

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Quote from: Cryptochondriasis on December 31, 2017, 05:46:41 PM

Very funny. And what happens when you actually lose money. Will the IRS give you your money back?

You can credit your losses to a future tax return. These are all well established rules.

Cryptochondriasis

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Very funny. And what happens when you actually lose money. Will the IRS give you your money back?

penig

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Quote from: jerry0 on December 31, 2017, 03:32:59 PM

I was told by accountant when doing these taxes that it doesnt matter what you exchanged bitcoin for whether its altcoin or usd etc. So i guess its not confirmed for everyone since some ppl might interpret it a bit difference as like exchange.

What if you have btc and altcoins in your bittrex account still and then withdraw it to your wallet? But dont do any trading on bittrex? I assume thats nothing since thats a withdraw to your wallet right?

That would seem the case. Its analogous to holding a stock or bond, you can buy hold them with no tax on the "profit" from them rising until you sell them. What the article is discussing is where people have traded one asset for another, seems to be a loop hole that these aren't taxed and they just tied up that hole. My understanding is trading already needs to be declared and taxed, so this is probably only going to affect those that dont declare crypto trades as tax under the "property" classification. Its not a change to tax on crypto trades, its a clarification.

william8829

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The IRS would like our feedback.

Quote from: ?? on ??

So starting on Jan 1st, 2018 anyone that trades on a US Exchange will be required to pay taxes on each crypto to crypto trade
for the tax year 2018 which is due by april 2019.
...
This will probably kill all US exchanges , as anyone with any sense will move to oversea exchanges that don't require this over reaching tax increase.

The exodus begins!?

Ix

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Quote from: jerry0 on December 31, 2017, 01:19:32 PM

Because if this is true, does anyone here have advice/tips to avoid something like this happening with having year of claiming capital gains but then being able to carry losses and get taxes paid back?

Day trading (or whatever the actual window of time is, it's much longer than 1 day) is considered income and taxed at income tax rates. Filing them as capital gains will get you some hefty back tax fines.

I am not an accountant, but I believe the established rules are to maintain a daily log of your total assets, you do not need to record individual trades. A daily log of total assets is not difficult.

But if you are day trading, you need to file INCOME TAX GAINS, not capital gains, or you will be misfiling and will incur significant penalties.

Ix

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Quote from: ?? on ??

Taxes were only required if you converted your Crypto to Fiat,

Not true. Crypto is not the first, or even the 10th "currency-like" commodity in the history of taxation. The rules on how to do this have been LONG ESTABLISHED. Just because you aren't familiar with them does not mean the sky is falling. The minor wording change also does nothing to affect this.

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All exchanges between crypto to crypto were considered (or at least arguable) were a like of kind exchange so no taxes owed.

Also not true. First of all, as I mentioned, like-kind exchanges require filing specific tax forms that you have not likely been filing. So if you are going to claim it is a like-kind exchange, you need to be filing these forms. If you are day trading, the point is already moot and you are required to pay income tax on your gains, whether or not you cash them out to fiat. Like-kind exchange does not apply to day trading and is completely irrelevant.

Quote

So starting on Jan 1st, 2018 anyone that trades on a US Exchange will be required to pay taxes on each crypto to crypto trade
for the tax year 2018 which is due by april 2019.

This is again wrong. Changing currencies is a "taxable event". I explained what this means - it means you are due to pay capital gains if you realized any. If you are day trading, this is irrelevant as you owe income tax. You are not being taxed on each and every transaction - that is silly.

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Does not matter if you are a US citizen or foreign citizen, if you trade on a US exchange you will owe the US Gov. Taxes on those trades.

No, you will not.

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Bittrex & Poloniex exchanges (Based in the U.S.A.) will most likely die within the year due to this tax change.

Nothing has changed.

cryptohunter

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seems impossible and impractical to calculate tax like this.

better for them just to accept capital gains on crypto to fiat

roll on DEX's

panghae

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Why the government always wants to regulate anything that are threats to their wrong doings?there wont be any freedom in U.S if this is really true.

Topic: IRS taxing cryptocurrency trades starting Jan. 1st. (Read 577 times)