Question about taxing | Bitcointalksearch.org

figmentofmyass

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Quote from: jseverson on November 06, 2018, 09:21:30 PM

Quote from: HeRetiK on November 06, 2018, 08:48:22 AM

From what I've heard the IRS will hound any former US citizen and resident for taxes no matter their current location. You may not have to pay them, but you would still have to deal with them, so good luck with that Tongue

They'll apparently hound you anywhere except Puerto Rico because it's exempted from federal income taxes for some reason.

Quote from: https://www.nytimes.com/2018/02/02/technology/cryptocurrency-puerto-rico.html

Puerto Rico offers an unparalleled tax incentive: no federal personal income taxes, no capital gains tax and favorable business taxes — all without having to renounce your American citizenship. For now, the local government seems receptive toward the crypto utopians; the governor will speak at their blockchain summit conference, called Puerto Crypto, in March.

Things might change if it gets exploited too much though. Not having to renounce your citizenship is a good thing but you'd still have to move, so it might not gain too much attention from US crypto people.

it's because they aren't a U.S. state. it's not as sweet as it sounds either. puerto rican residents still have to pay federal payroll taxes. if you're a self-employed trader/investor, that means 15.3% flat for medicare and social security. puerto ricans also pay income taxes---they just pay it to puerto rico instead of the federal government. they also pay 11% in sales taxes, significantly higher than any state in the USA.

if it were straight up 0% income taxes and sales tax weren't so high, i'm sure more people would move there.

Stedsm

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Quote from: jeromix on November 08, 2018, 05:30:29 AM

I do not see that crypto will be considered as an asset and will be taxed like this. It is not fair because cryptocurrency was also used as a form of payment and not really an asset.

Cryptocurrencies (esp. BTC) are being seen as speculative assets only through which people can earn a buck by ^investing^ (putting) their money in them for a certain period of time (or till whenever they can hodl). It's true that market conditions have never been the same and are unfavorable at times, so something that's uncertain - can't be called a currency first of all as there's no stability (and it's actually not even needed Wink

) We can't really decide what's fair and what's not as finally, the power is in their hands to approve/reject crypto trading and if approved, then on what conditions.

Quote

Government may able to taxed crypto but they should consider doing it on those local exchanges. The local exchanges are the best tool for them to tax users on crypto during the trade. The government could implement and additional a percentage of tax on every transaction being made in the exchanges.

I believe they are already doing it [as a few exchanges take a fee (not talking about escrow charge, but tax that either they need to pay or it's charged on the user end itself) to give to Governments], and they've even got our back with the KYC norms that need to be met as a requirement, else there won't be any such trading allowed. The LIFO and FIFO methods presented here by dkbfl is something you should look for, or create your own method to keep records of every single trade you make, so not to get in any problems like getting caught by them under the radar for not paying taxes or not keeping records.

jeromix

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Quote from: Drysprinkles291 on November 05, 2018, 06:12:39 PM

As we all know by now, cryptocurrency capital gains taxes are becoming a point of interest for governments tax organizations. Annoying! How can I minimize my crypto tax liability while staying in the good graces of the IRS?

I do not see that crypto will be considered as an asset and will be taxed like this. It is not fair because cryptocurrency was also used as a form of payment and not really an asset. Government may able to taxed crypto but they should consider doing it on those local exchanges. The local exchanges are the best tool for them to tax users on crypto during the trade. The government could implement and additional a percentage of tax on every transaction being made in the exchanges.

jseverson

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Quote from: HeRetiK on November 06, 2018, 08:48:22 AM

From what I've heard the IRS will hound any former US citizen and resident for taxes no matter their current location. You may not have to pay them, but you would still have to deal with them, so good luck with that Tongue

They'll apparently hound you anywhere except Puerto Rico because it's exempted from federal income taxes for some reason.

Quote from: https://www.nytimes.com/2018/02/02/technology/cryptocurrency-puerto-rico.html

Puerto Rico offers an unparalleled tax incentive: no federal personal income taxes, no capital gains tax and favorable business taxes — all without having to renounce your American citizenship. For now, the local government seems receptive toward the crypto utopians; the governor will speak at their blockchain summit conference, called Puerto Crypto, in March.

Things might change if it gets exploited too much though. Not having to renounce your citizenship is a good thing but you'd still have to move, so it might not gain too much attention from US crypto people.

atrocityx

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Like others here have said in USA all trades on crypto is taxed as property, whether you cash out or not... to pay the least amount of taxes you need to go 12 months without trading an asset so it becomes a long-term capital gains tax over a short-term and its considerably less % wise, but your potential earnings not daytrading could be less, so you'll have to weigh these two options... and if you're in the USA and are attempting to avoid paying taxes, then you shouldn't be day trading on coinbase/GDAX because they will 1099K you if you clear a certain threshold of trades... the system is borderline criminal when it comes to how its taxed and its fairness, but the flipside is if you owe a lot of taxes, you made a lot of money and that I guess makes up for it. Places like Binance currently do not report taxes to USA so its probably okay for now, but you have to report you have money overseas or you can be fined.. and you never know what 5 years from now may look like, and you may get back reported. You'll have to analyze your risk/reward ratio of all options yourself.

HeRetiK

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Quote from: jseverson on November 05, 2018, 08:46:46 PM

Quote from: figmentofmyass on November 05, 2018, 07:34:31 PM

one way to minimize your tax liability in the USA: if you mostly just hold for long periods of time, consider aiming for long term capital gains: if you hold for at least a year, your gains are taxed at a lower rate, usually 15% for most people. short term capital gains are taxed at your regular tax rate (up to 40%).

So much this.

You should also try to avoid crypto-to-crypto trades because each instance is considered a sale and a purchase.

If you want to take extreme measures, move to Puerto Rico lol.

From what I've heard the IRS will hound any former US citizen and resident for taxes no matter their current location. You may not have to pay them, but you would still have to deal with them, so good luck with that Tongue

paxmao

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I suggest that you either go full private, using monero and other privacy coins, or simply pay all your taxes paying a good accountant. What is surely dangerous is the middle ground.

PETES

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Quote from: jseverson on November 05, 2018, 08:46:46 PM

Quote from: figmentofmyass on November 05, 2018, 07:34:31 PM

one way to minimize your tax liability in the USA: if you mostly just hold for long periods of time, consider aiming for long term capital gains: if you hold for at least a year, your gains are taxed at a lower rate, usually 15% for most people. short term capital gains are taxed at your regular tax rate (up to 40%).

So much this.

You should also try to avoid crypto-to-crypto trades because each instance is considered a sale and a purchase.

If you want to take extreme measures, move to Puerto Rico lol.

Yeah that will be your last resort and if you're really a crypto enthusiast and sick of the taxes the go find crypto haven.
Well it's really annoying to deal with huge taxes like they can't even consider bitcoin as an asset yet they keep it taxable.

Magelausa

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Many countries have not yet had time to write laws that affect the juridical field in which a cryptocurrency would be included.
The situation may change in the next 10 years, but so far in such countries as Slovenia or the Czech Republic you can use cryptocurrency, and not be afraid that you will be forced to pay taxes.

Gloverwrt

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I don't think there is any way to evade tax when you're under the jurisdiction.
And tax evasion could be considered as crime. And if global regulation actually ever becomes a reality, everyone from every region would be subject to taxation on all bitcoin transaction.
For now you can move to some other region if you make numerous trades and taxes is a real issue.

jseverson

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Quote from: figmentofmyass on November 05, 2018, 07:34:31 PM

one way to minimize your tax liability in the USA: if you mostly just hold for long periods of time, consider aiming for long term capital gains: if you hold for at least a year, your gains are taxed at a lower rate, usually 15% for most people. short term capital gains are taxed at your regular tax rate (up to 40%).

So much this.

You should also try to avoid crypto-to-crypto trades because each instance is considered a sale and a purchase.

If you want to take extreme measures, move to Puerto Rico lol.

figmentofmyass

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Quote from: crairezx20 on November 05, 2018, 06:50:25 PM

Quote from: Drysprinkles291 on November 05, 2018, 06:12:39 PM

As we all know by now, cryptocurrency capital gains taxes are becoming a point of interest for governments tax organizations. Annoying! How can I minimize my crypto tax liability while staying in the good graces of the IRS?

I think if you are just exchanging your crypto in P2P or deal with someone near in your country you don't need to pay for tax and I think you can minimize your tax if you use fiat

that's incorrect. the OP has implied they are under the tax jurisdiction of the USA. all capital gains from cryptocurrency sales are taxable because it's taxed as property. like-kind exchanges also don't apply to altcoin trading, so every buy or sell you make (bitcoin or altcoin) is taxable.

one way to minimize your tax liability in the USA: if you mostly just hold for long periods of time, consider aiming for long term capital gains: if you hold for at least a year, your gains are taxed at a lower rate, usually 15% for most people. short term capital gains are taxed at your regular tax rate (up to 40%).

crairezx20

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Quote from: Drysprinkles291 on November 05, 2018, 06:12:39 PM

As we all know by now, cryptocurrency capital gains taxes are becoming a point of interest for governments tax organizations. Annoying! How can I minimize my crypto tax liability while staying in the good graces of the IRS?

I think if you are just exchanging your crypto in P2P or deal with someone near in your country you don't need to pay for tax and I think you can minimize your tax if you use fiat so if you can exchange your crypto to someone near you then you can have a FIAT where you can use for buying product with less tax compared to use crypto for buying products online.

Drysprinkles291

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As we all know by now, cryptocurrency capital gains taxes are becoming a point of interest for governments tax organizations. Annoying! How can I minimize my crypto tax liability while staying in the good graces of the IRS?

Topic: Question about taxing (Read 348 times)