Topic: Potential Disaster for those Lending Bitcoin on Exchanges? (Read 2406 times)
OP you're most likely right. And people who lend like that most likely don't care.
None of this addresses my question....which specifically asks about the tax implications for U.S. citizens who are trying to comply with tax laws.
Vote for Bernie sanders and forget about the tax for a few years who cares right?
None of this addresses my question....which specifically asks about the tax implications for U.S. citizens who are trying to comply with tax laws.
Yep but they don't touch USD other than USDT which I guess is someone else's problem. What with the asking for names, mine's fake, and limits on withdrawals without them I guess it's hotting up now.
I doubt I could ever trust my bitcoins to anyone else, no matter how good he is. It is more like a gamble. The price of bitcoins at nowadays market is not very stable, therefore it might just look like you are giving yours up for grabs with a slight chance to getting back more than you have invested.
Lend out coins and never declare it? You get peanuts anyway and none of the USD exchanges in the US offer it anyway. I'd take my profits straight from the exchange and spend them somewhere.
I've looked all over the net to try to find a discussion revolving around those who loan their bitcoins to other exchange members who then use them to margin trade. (Poloniex, for example.)
I did find one guy who claims that all he does is report his bitcoin interest as income. I think that's a recipe for disaster.
When I look at the lending reports I get from Poloniex, I realize that there is no way to properly account for my lending activities. Why? Because in the U.S., bitcoin is property - which means - each loan is a swap. Therefore, you have to keep track of bitcoin's price at loan origination and bitcoin's price at loan's end. Poloniex only publishes the end of the lend information. No idea when certain coins were lent and for how long. How do you do account for this when you can generate 100's of loan transactions in one day on Poloniex?
Also! The elephant in the room is this: You can't possibly make any type of return if you are loaning out your coins when the price is rising.
Loan 10 bitcoins @ 400 per bitcoin. Loan is out for 2 days. 2 days later you get your 10 bitcoins back plus .01 bitcoins in interest. However, bitcoin could be at $430 at the end of your loan. You've just created a capital gains event of over $300 while making only $4.30 in interest!
Am I wrong? Thoughts? Let's discuss!
I did find one guy who claims that all he does is report his bitcoin interest as income. I think that's a recipe for disaster.
When I look at the lending reports I get from Poloniex, I realize that there is no way to properly account for my lending activities. Why? Because in the U.S., bitcoin is property - which means - each loan is a swap. Therefore, you have to keep track of bitcoin's price at loan origination and bitcoin's price at loan's end. Poloniex only publishes the end of the lend information. No idea when certain coins were lent and for how long. How do you do account for this when you can generate 100's of loan transactions in one day on Poloniex?
Also! The elephant in the room is this: You can't possibly make any type of return if you are loaning out your coins when the price is rising.
Loan 10 bitcoins @ 400 per bitcoin. Loan is out for 2 days. 2 days later you get your 10 bitcoins back plus .01 bitcoins in interest. However, bitcoin could be at $430 at the end of your loan. You've just created a capital gains event of over $300 while making only $4.30 in interest!
Am I wrong? Thoughts? Let's discuss!
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