Topic: Tax and crypto (Read 205 times)

Since each country is so different when it comes to taxes, the best thing to do is to consult a tax attorney to guide you, now if you are only earning a few hundred dollars you may decide to not bother since that is not a big amount of money but once we are talking about big amounts of money you will need to fill and pay your taxes, no one likes it but it needs to be done.

without regulation crypto curency without tax
only in japan bitcoin must pay tax, because in there bitcoin is ready regulation

Keep a record of each and every transaction. If you earn bitcoins for providing a service, pay income tax on it.
Calculate your capital gains on sale of bitcoins (or even if you exchange it for other cryptos). Report it and pay taxes on it.
Your millions will be worthless if you get nailed by authorities when you try to access it.

Exactly, I was thinking you can only talk about tax and taxing on income when it is lawful. Where there are no laws, tax might not be visible and in this case, I'm not sure if any country has made bitcoin a mandatory means of payment to be taxed on just as your idea posits.

Currently, I'm not earning a lot, so I don't have to. However, if my capital grows into multiple tens of thousands, of course I will.. And you should too.
Depending on where you live, it could get you into deep trouble for hiding your capital in the crypto-world.

If you use good wallets, like Electrum, it should be relatively easy to keep track of your transactions, so if you feel the need to pay taxes, it should be possible to do it without too much additional effort.

It is going to get pretty ridiculous and murky considering how many micro transactions one makes in a year. I will report of course but one has to think about how to do so and it won't be easy. For me as long as you go with what you have at the time and what you started with that is good enough I have zero clue how you would pay on every single transaction. That would take ages and I doubt we the people and the accountants want to sift through all of that, only to arrive at the same result.

I'd have to disagree with you...unless you have some more specifics to add. I've been at this for about a month and I have created, from a taxation perspective, a labyrinthian maze of transactions using Coinbase, Binance and Shapeshift which will, as far as I can tell, make if close to impossible to determine what my cost basis is for the amount of coin that I convert back into fiat currency.

After pondering this for a while, it seems that trying to keep track of this like you would with individual stocks is out of the question. I'm also thinking that people may lose track of the sometimes (not all the time) God-awful fees we pay for simply moving currency from one site to another which will add to the cost basis of our holdings. And isn't it true to say that there is no record of currency conversions done at Shapeshift because you have no account there?

My point is...if you cash in 100 altcoins, how can you determine your cost basis after all the gyrations we have to do with our coins - especially coins other than what I call the big 3: BTC, ETH, LTC.

I will continue to research this and ponder it but if anyone has any specifics on this I'd love to hear. Maybe by the time we cash out, we'll have so much money we'll simply hire an accountant to take care of this.

On a somewhat unrelated topic...I was going to join eToro to do copy-investing (copying the trades of proven investors) but the reality is that I would be entering into literally thousands of forex contracts over the year all of which, I assume, the IRS would want individually reported on your tax return.

I have not filed any tax related to crypto yet because I have not cashed out that much money from the crypto wallets to my fiat currency. In my country as long as I'm keeping the funds in the crypto form it is not of much concern but one the crypto coins are converted into fiat currency and when I withdraw it to the bank then many question might arise on it. Im still waiting for the government announcement regarding the bitcoin and its use within the country. Up until now I have only used bitcoin for purchasing online and in the international market so that I can spend the coins easily.

With only few instances I have cashed out little fiat into bank which is tolerable and does not come under any slot of income tax. So I think there won't be much caner and I will keep the withdraw limit restricted to that much per month and may not file the tax until its completely legal. :-)

Keeping up with your tax in crypto is I think the most difficult thing. But most of the countries support system of paying taxes on actuarial basis which means when you en-cash your cryptos. So if you are an investor and invested some of your dollars in cryptos and now are withdrawing it within the same year. Calculate the net increase in value of currency this is your short term capital gain. If you hold it for more than a year it becomes long term capital gain. But if you are directly earning cryptos just show it in Income from other sources.

It depends on how your country treats virtual currencies.

In my country , bitcoin is being treated as a digital asset, and not as a currency, which means that you need to pay the same tax you would pay on selling a house on profit.
If bitcoin is being treated as a currency in your country, you don't need to pay any taxes at all I believe, it's the same as you bought euro for a a trip, and after the trip you had some leftovers and you sold them, but the euro went up a bit so you earned a small profit, you don't pay taxes for such, same goes for bitcoin.

Im still learning how taxes work. I have no idea how Bitcoin made on signature campaigns would get reported for example, and if the taxes on that are different from the taxes of buying Bitcoin in an exchange and selling it. I also don't know if transactions between BTC and fiat back and forth or even between cryptos have a tax. Everyone says their own version of how things are. Financial advisors are clueless when it comes to Bitcoin. My logical conclusion is to keep holding it and not sell anything, and keep trying to improve your Bitcoin holdings for the future. Im scared that in the future there will be no money to pay for pensions for example, and BTC could be my savior from that, so im just keeping it and hoping it keeps going higher (as it should). I will bother with learning about taxes later, learning about BTC is time consuming enough. I have not done anything illegal to obtain my BTC so im not worried about that. I could prove if needed that I made them legally. You could show them for example that you posted here and got BTC, im not sure exactly how (maybe signing public addresses used to receive payments here for example). This is all too new and I don't want to be the first idiot that gets taken advantage of with their experiments in taxation so it's better to just hold it all for the time being and we'll see.

As of yet I have not earned anywhere near enough to warrant being taxed but it is fairly easy to do so, you will only be taxed here when converting crypto back in to fiat and so therefore you just have to keep track of those transactions which is easily done within the sites you use or bank statements etc.

I have not been asked any questions from official yet regarding the taxes for bitcoin or crypto income. This is because I have always paid my taxes and never hidden a thing while filing it. In my country the system for tax paying or tracking is not that advance as like in developed countries. I live in third world where the financial institutes will not ask any more question about the funds deposits and withdraw. They will just clear the transactions as they would do it normally.

But its my duty to complete the taxation for the same on duly basis. The wallet which I use for selling my bitcoin into my local currency uses the KYC verification process which means my transaction is always tracked by the tax department. I always provide the invoices for the sells made at that wallet which comes under the category of digital good and services selling. Thats easy way to do it. But I have the news that everything is going to change here as its not the proper category for bitcoin.

How do you keep track of your tax in regards to crypto?