Topic: Unpaid Capital Gains Tax on forgotten exchange accounts (Read 196 times)

Are you sure you were selling for gains? You start your story with buying at the top. If you sold for losses we're talking about capital losses and you bought back in within 30 days you won't be entitled to those losses anyway.

How much did it go down from your original buy to your trading zone. It's possible that your original losses would exceed any smaller gains you had in your trading zone. And it's good of you to settle up, give it your best effort. Don't sweat it too much if you cant get this information back, the IRS isn't likely to chase you down, especially if your original losses would minimize any gains they could tax.

You don't suppose the Tax Office were too busy laughing that someone was bothering with the Bitcoin FUorked coins and decided to give not you a break?

Dude, they are not going to come after you for such a small amount of money traded. Do yourself a favour, relax & forget about it.

I know a person (not me honestly ) who converted his free BCH & BTG into BTC & exchanged it all for fiat in 2017/18 & didn’t declare a penny. That person (not me honestly) hasn’t heard anything from the tax authorities so please don’t worry about your situation.

I can only speak for the tax situation for here in Australia:

In the first example a person buys $2000 worth of crypto and sells the entire amount 24 hours later for $3000, they have made a "profit" of $1000. Because the sale occured less than one year from the time the purchase was made, the user pays Capital Gains Tax on the entire $1000 at the applicable tax rate determined by the user's other taxation lodgement details.

In the second example, as with before, the user buys $2000 worth of crypto but then holds it for more than twelve months before selling the entire parcel for $3000. Although the "profit" is $1000 because the user held the asset for more than twelve months, the CGT is worked out on half of the profit amount (half of $1000 is $500).

We can't know for sure whether you had any tax liability without knowing the exact timeline. Did you only buy in 2017, and then start selling in 2018? If so, you probably had no taxable net gains for the year. Even so, assuming you were required to file a tax return for 2018, you technically were required to report these transactions on Form 8949 and the net gain/loss on Schedule D.

The good news is that these amounts are so low that you are unlikely to be on the IRS' radar, and your activity is unlikely to have thrown off your tax liability by much, if at all. I would still recommend recovering your trading history and running the numbers, if only for peace of mind. In this situation, it's probably not worth poking the bear and amending for such a low level of activity.

Thanks for the help guys, I've just submitted a help request to both Coinbase and Gemini, so hopefully they get back to me soon so I can get this sorted out. If I recall correctly, the total amount that was traded couldn't have been more than $300 total, as I only had 0.01 ETH last I checked in my offline wallet. It is entirely possible that I did trade at a loss, but I just want to be certain that I don't actually owe these people anything.

I am not really familiar with the US's capital gains tax particulars but my basic understanding is that capital gains tax is literally a tax on your gains. This is imposed on your cryptocurrency holdings upon selling because that is the only time when the gains are realized. Meaning to say, that tax won't be imposed on your cryptocurrency holdings if you are not selling even if your profit is soaring high in paper. Now, the logic is that if you are at a loss, then why pay for gains tax? There is no gain in the first place. But, again, that will only take place when you are actually selling at a loss.

It sounds like you might not have any capital gains tax liability.

If you had net trading losses, in terms of USD, you should not have a capital gains tax liability. I would suggest speaking to a tax professional who is familiar with your specific situation, and who has reviewed your trading records (that you give them to review) to advise you. If you do owe back taxes, your tax professional will probably advise you to file an amended return for the years you underpaid.

To gain access to your accounts, you will have to contact Gemini/Coinbase and complete whatever verification they want you to complete.

Do you remember trading much with it and is there not a threshold for declaration with the IRS?

I think it's possible you could give them your email address and kyc info and they could authenticate it's you and return your account info... They'll be better at knowing whether they can than us.

Good Evening,

I first got into BTC back during the 2017 rise and crash, where I made a rushed decision to buy in with approximately $1500 at the ATH, only for it to steadily come back down and wipe out whatever gains I had. During that crash, I recall semi frequently selling and buying ETH along with Litecoin, and frequently adjusting the ratios I had of each. I withdrew whatever I had in BTC and ETH to my private wallet, and not touch it until 2019, where I fell for a giveaway and lost the majority of the BTC. After this loss I was turned off on crypto and never logged back into that Coinbase or Gemini account again. I was foolish for not having educated myself on what I was truly getting into before hand and the loss that occurred what no-ones fault but my own.

Since falling down the Bitcoin rabbit hole three months ago, my interest in crypto was re-ignited and I reopened a Coinbase account with my main email. Now, I am greatly concerned over the possibility of having to pay a capital gains tax penalty for making the quick buy and sell transactions on a throwaway account from years ago. Worse yet, I do not remember the username or the password for that email. Would it be possible to contact Coinbase and Gemini to possibly recover the accounts so I can file to pay whatever taxes I may owe?