I had so much shit coin like Poe and TRX. I got in at 2 and 5 cents so I profited, but I bought back into both around .20 which negated a lot of my profits. I was waiting for them to hit .35 and instead they went the other way.
Wish SNOV would come back a little more. Could take a 25% loss and put into a longer term coin or HODL.
Currently only in ETH, LTC, SNOV, NEBL and BNTY (my shittiest coin). Will be in VEN as soon as some transfers clear
Should i be picking up more VEN even now? I originally got in at $2.50 but only bought 80 coins. Also TRX might be Shit but it sure does have alot of supporters...
BitConnect was a top 20-25 coin for awhile, despite being a clear scam. Invest in the tech, the real world use cases and the dev team, not in the amount of people who support it.
Oh I’m happy af it’s coming back. Just wondering if I cut and run now at a loss to move the money elsewhere.
Depends, if that wall gets eaten (all purchased) then there is not resistance really to keep it from rising, if it is too big then people will keep undercutting the wall to sell and price can drop
Anyone ITT that’s made money on these cryptos met with a CPA yet about what and how much to report? Whole issue is pretty convoluted and the IRS hasn’t really given any ruling whatsoever. Our stance currently is cash-in/cash-out for the big 3 but it gets dicey when you are making gains by trading BTC for other cryptos and back to BTC with no cash being involved or if you trade BTC for something else, while BTC is high, BTC drops a bunch, and you trade back into BTC at a lower price after avoiding the loss. Essentially the concept of a “wash sale” in the stock market. Are crypto for crypto trades/purchases/whatever tracked by the marketplaces or are those all autonomous?
That’s pretty much my plan. I’m going to report when I sell for cash. Calculating basis could be confusing if I sell in pieces, but when I get out I’m planning on selling at least 90% of my portfolio and using all my basis at that point.
I don't know how the Ira would get them as most are exchanges in different contries. Most exchanges have files you can export. Everything I've read is most every crypto to crypto trade is subject to short term capital gain or long term. However, I think the irs is going to focus on coinbase and cashing out for now.
Theoretically they could go back and treat all the Crypto to crypto exchange gains as taxable. I’m just not sure how they would get the info to base their notices of tax owed on... are your BTC to ____ Crypto buys and sells history registered on a marketplace account somewhere that required your ID verification when opening it? Only way I could see it being a thing. Unless they feel like looking into all BTC/Lite/Eth cashouts to see whether or not you ever purchased that many “shares” of said currency to begin with, and if not, how did you get more... Also, as of right now they’re saying BTC miners are supposed to treat that as a schedule C business that’s subject to self-employment tax which I could see fucking a LOT of people.
Yep there’s gonna be a lot of people trying to get creative when reporting that or not at all. You never bought shit so you don’t have cost basis to net against the selling price. Either you don’t report it and may get it reported for you by Coinbase or whoever, or you try to report it as a capital gain and they send you a notice some time from now with an extra 15.3% tax on what you mined and cashed out + interest and probably tack on an Underreporting Penalty on top that really pisses you off. I’d say anyone that cashed out a decent amount for profit in 2017 talk to a CPA about it if you prepare your own tax return Last thing you want is the IRS digging through your crypto accounts and making their own judgement bc you tried to get cute
The last hour looks pretty brutal. Are we in that stage of a bubble where everything comes back down even harder now?
If you look at and exchange you look at the chart you will literally see a red wall that is vertical. The higher the wall the more selling pressure that is being exerted. In essence it relates to resistance preventing a stock from moving upward; however once a stock breaks the top resistance level it is prone skyrocketing because the demand to buy outstrips the demand to sell in such a degree that there is next to no selling pressure. https://www.google.com/amp/s/smartoptions.io/read-buy-sell-walls-crypto/amp/
Haven't talked to a CPA but I'm a tax attorney so I have an idea of how it should all work, although I haven't done any research or given it a ton of thought. Basically, any time you trade one crypto for another crypto, you are supposed to realize and recognize a gain or loss. My gut says that, despite being administratively easier for the taxpayer, the cash-in/cash-out method you describe is almost certainly not in compliance with the tax laws. I seem to recall some sort of IRS statement (maybe at a CLE) where they took the position that they don't really care if it's an administrative pain in the ass for the taxpayer to track every trade; it's the taxpayer's choice, so they should comply with the law. Besides, all exchanges I have used have a way to track each individual trade and order history, so compliance wouldn't be all that bad. cointracking.info does a good job consolidating the info and giving you a BTC to USD conversion at the time of the trade, I believe. As for the wash sale rules, I'm not sure they'd technically apply to the situation you described, although they may apply by analogy. The wash sale rule only applies to "securities," and I don't think many crypto coins would be a security but that is something I would have to research to reach a solid conclusion on. Even if some coins or tokens do meet the definition of "security," a lot are definitely not securities.
looks like as long as you haven't cashed out to USD you are going to hold off on reporting? I bought BTC/LTC/ETH in 2017, but moved it all to binance for alts. Never moved it back to Coinbase to revert back to BTC or anything. At some point I think I will cash out by selling to BTC->Coinbase->USD, then hopefully it will be a straight report. Like someone else said, what makes me nervous is I will have 2 transactions, one going out let's say with 1 BTC, and one coming back with 2 BTC. I guess you just net that as the gain, but feel like questions get raised about where did the extra BTC come from, and on top of that whatever BTC has gained since it's been in USD.
The only ones I’m on that required an ID is Coinbase/GDAX which is where I’ve bought all my BTC/ETH/LTC (and where I’ll sell it for cash). I think the IRS is already going to have enough on their plate with that exchange, I just don’t see them having the manpower or wherewithal to track the activity on the exchanges that trade alts like Binance, etc.
It's my understanding that if your 2017 trades were crypto to crypto, then they can be treated as 1031 like-kind exchanges. The new tax bill limits 1031 exchanges to real property rather than any property, so all trades will be subject to capital gains in 2018, including crypto to crypto. As for whether trades on the exchanges are anonymous, the answer is it depends. Coinbase keeps track of it, but they're in a reporting grey area at the moment. But if you cashed out from Coinbase, you should report it to be safe. If you bought on Coinbase and trade on Binance for example, which is offshore, then nothing from Binance will be reported.
yea "wash sale" is just lack of a better term for parking your crypto in another crypto while the former takes a dive and then getting back in. Not sure if there's a terminology out there for it in the Crypto world but from what I understand there's laws for this situation regarding mutual fund trading that they'll probably apply to this type of currency as well. I don't know much on the mutual fund rules/situation just one coworker used that as a comparison. your guy is most likely going to end up being right, but it's just not set in stone yet one way or the other. At least not by any IRS publications or on Checkpoint - which is ours and most other CPAs I know's resource for tax rulings. are we supposed to tell clients that, even though they haven't received any actual USD, that because they traded BTC for ____, that currency appreciated, they trade it all (or some of it) back to BTCs, that they have to recognize that gain then before cashing out any of the BTCs? Also do you/him have an opinion on when and how much income to claim for mining? It would seem standard cash-basis recognition rules would mean they don't technically have any income until actual cash is received, ie - cashing out BTCs mined. Is that the case or should it be treated like the crypto to crypto gain where it's recognized as income when the BTCs become available, even though you haven't received any cash for them? The valuation there, where something just accumulated over time seems like another problem in and of itself, since my limited understanding of the mining process is that it's basically a bunch of pennies accumulating over time.
as of right now it's a really really gray area as to whether or not you have something recognizable as income, see oranjello's guys stance. we met with two different clients today who bought BTC - traded it for ADA - and some of it back to BTC after having that ADA go up after their initial conversion. We told them that currently we don't have enough reason to believe they should report anything that occurred there because they haven't cashed out any of the BTC. You seem fine having stayed in other ALTs and not moving those appreciated currencies back to BTC.
My CPA (my mom) has so far requested I keep the crypto stuff to myself. I’m basically like Capone now.
This...My father is a CPA as well. If people aren't aware the IRS is a terribly run organization (typical gubbmint) and they are incredibly short handed. They are going to need a blockchain of their own in order to keep track of everything.
Yep we discussed the idea that it's a like-kind exchange initially. But 1031 exchanges explicitly exclude things like securities, which is the closest thing I could say a crypto currency is... it's probably best for people to go back and try to track their initial buys of btc/lte/eth cost basis and then price of ____ crypto they traded them for in every trade thereafter... people may get away with a lot for 2017 if they didn't cash any BTC out but there's gonna be a firm ruling at some point this year and it'll most likely apply to cryptocurrencies bought/traded after _____ date which could likely be 2017 or earlier. And people will be stuck with paying taxes on things that happened in the past whether it be capital gains rates or short-term ordinary income tax rates.
also Oranjello / Houndster anyone else that has talked about it or has an opinion, if you're not going the capone "hide it and hope the IRS doesn't find out" route - since some of these markets are held in other countries... whole new can of worms - FinCEN form 114 and IRS 8938 statements of foreign assets... do these qualify? If you own $10,000 USD worth of Crypto on a market located outside the US wouldn't that force you to file a FinCEN? same with having $50k single/$100k married worth of USD in non-US based crypto market to file a Form 8938?
while true, you better go ahead and file your 2017 by 4/15 and start the waiting game. hope you don't get a notice before 4/15/2021 asking for some dough
My plan is to report gains against USD for 2017 I had an original cost basis at around $4000 and one time converted back to cash around $7000. I never converted back to USD at any other time. I have the cointracking software for this year and I am tracking every trade.
You are legally obligated to comply with the law. Whether you choose to do so is obviously your choice, but just because it's not being reported doesn't mean you do not owe tax. I know what a wash sale is. My point was that the vast majority of crypto coins and tokens are likely not considered to be "securities," and therefore the wash sale rules do not explicitly apply to them. That is a good thing. As for your mutual fund point, you should look into tax loss harvesting, because it's a very common strategy to bypass the wash-sale rules. That may be what your friend was referring to. As I said in my original post, I do not have a CPA. I work and research tax every day, though, so I'm not just speculating. As for IRS guidance, the only official guidance released is IRS Notice 2014-21, which defines crypto coins as "property" for purposes of the Internal Revenue Code (as opposed to currency). You work in public accounting, right? In that case, yes, you are to tell clients that even though they have not received any USD, because they exchanged one crypto coin for another, and even though they ended up back in BTC, then yes they owe tax. This is elementary tax. IRC Section 1001(c) says that, "Except as otherwise provided in this subtitle, the entire amount of the gain or loss ... on the sale or exchange of property shall be recognized." Trading one type of property (BTC) for another (FCT) is an exchange of property, and therefore you recognize gain or loss. Administratively it's an absolute bitch to compute but that's where the law currently stands. Whether people voluntarily report crypto gains and losses is an entirely different issue, but whenever someone asks me what they should do I tell them they legally owe tax on recognized gains. As for mining, I haven't given it a ton of thought but it's just like any other kind of property you create (e.g., a painting). You aren't obligated for any tax until you recognize income. I would say that mining a coin would be qualify as a realization event, but until you sell it or exchange it for another type of property there's nothing to recognize. You would probably have $0 basis, although you could definitely argue that the cost of electricity could constitute basis (good luck quantifying that). You're right about mining, but since it's be such a problem to calculate basis (if you use electricity as your basis) in reality you'll just take a $0 basis and whatever the value of the coin is upon sale or exchange will be your amount realized.