Official Cryptocurrency Thread: Skepticism to Speculation to FIGHT! FIGHT! FIGHT!

Discussion in 'The Mainboard' started by Nantucket, Jan 29, 2017.

  1. Chumbolone

    Chumbolone Well-Known Member
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    Is anyone experienced with Terra/Luna? Mirror, Anchor protocols?

    I’ve been doing test runs just trying to familiarize myself with the UI, how to stake/lend, mint, etc. It’s been vouched for by people I respect/trust, but I have to admit I still don’t understand how Anchor guarantees a 20% return on UST? About to make a significant investment in it, just curious if anyone else messes with it?
     
  2. HuskerInMiami

    HuskerInMiami Well-Known Member
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    I just accidentally bought $3500 in ETH.

    I have a landscaper coming by Thursday that is gonna charge $3500. I was playing around trying to see how you trade it. I got worried I’d send it to some random address so I toggled to buy. Then started eating dinner. Came back and just double clicked on buy while on mental autopilot.
     
  3. FourClover01

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    So it looks like you'll be mowing the lawn on Thursday.
     
  4. kennypowers

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  5. Penguin The Duck

    Penguin The Duck Well-Known Member
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    I’m not 100% positive as all this is new and a gray area, but trading crypto on a side chain or swapping for a derivative or token of a crypto on another network isn’t actually a taxable event. So swapping Binance for something on their side chain isn’t taxable.

    Or there should be losses factored into things like gas fees in the swap.
    There is very little software or resources on exchanges to track these events, but Coinbase absolutely reports every event to the IRS.

    I thought someone shared a tweet a few months back to clarify this couldn’t find it in the search

    Google gives misleading research and says staking, farming and basically everything crypto is taxable.
     
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  6. Arrec Bardwin

    Arrec Bardwin He ain’t me, he can’t be me
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    There isn’t super clear guidance but most people would tell you any time you interact with a blockchain is a taxable event.
     
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  7. Penguin The Duck

    Penguin The Duck Well-Known Member
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    I understand this part, but the government hasn’t explicitly said or defined this to be true. The big thing this year was answering whether you’ve invested and sold crypto. I thought it was user15000 or southside that shared a tweet and clarified this and I could be misquoting the entire post
     
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  8. Arrec Bardwin

    Arrec Bardwin He ain’t me, he can’t be me
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    It’s your funeral man. Intentionally not reporting stuff is a great way to get fucked. IRS budget is going to 10x over the next decade or two.
     
  9. Penguin The Duck

    Penguin The Duck Well-Known Member
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    To clarify, I believe the “realized gains” is the ultimate factor in IRS reporting. They base it on the first in first out method. So if I swap eth > bnb > pnda > cake and then back to eth, at the end of the day you and the government care about the total gain. Not the itemized tracking of each swap, although some links disagree. But FIFO works the same way when it comes to reporting.
     
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  10. Penguin The Duck

    Penguin The Duck Well-Known Member
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    This isn’t the first time someone said this. I’m not dodging the IRS. I’m playing by the rules or I’ve cheated them for several based on professional advice.
     
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  11. Penguin The Duck

    Penguin The Duck Well-Known Member
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    First in first out method.

    If I buy and record, and just report my gains back to fiat or to another exchange, then I’m good and is taxable. Tracking my $3 daily stake to bao when prices fluctuate and hodl on the same network for over a year has been told to me multiple times is not taxable. Until the gain/loss is realized.

    Edit: I’m still tracking dollars invested. I’m not tracking the coin or unit value that was purchased at the time I swap.It works itself out with FIFO. You buy something for 1000 and sell for 1500. Doesn’t matter how many times you swapped or sold it. You either made $500 or didn’t.
     
    #14461 Penguin The Duck, May 4, 2021
    Last edited: May 4, 2021
  12. PaulKemp

    PaulKemp Well-Known Member
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    Is it a write-off if you lose your keys?
     
  13. Penguin The Duck

    Penguin The Duck Well-Known Member
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    Exactly.

    How can you prove the key was lost? How can the government prove you owned the key/wallet?

    The real question is how is everyone tracking their buy and sells?
     
  14. jorge

    jorge Founder of Post ITT if your team sucks
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    cointracking.info
     
  15. jorge

    jorge Founder of Post ITT if your team sucks
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    Except I'm going to smash their trade limit
     
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  16. PaulKemp

    PaulKemp Well-Known Member
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    I feel like I’m going to be net negative after this run and require a paid version of this to prove it. What’s the cost if you buy the highs and sell the lows say 1000 times in a calendar year across 20 exchanges? And is it able to parse incomplete info from the exchanges?
     
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  17. PaulKemp

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    Quick search led me here: https://cryptotrader.tax/blog/reporting-stolen-or-lost-cryptocurrency-for-tax-purposes

    States lost keys are not a write-off, but it’s unclear what would happen from a gains perspective. Could the IRS come after me for a couple lost BTC from 2011 due to negligence on my part? If not, what stops this exploit? Especially if you start doing something like off exchange trading + Monero + oh no I lost access
     
  18. user15000

    user15000 Well-Known Member

    I won’t pretend to be a tax expert, since all I’ve ever done for a long time now is buy and hold btc.

    That said, my understanding is that every move into or out of a crypto is a taxable event. Your eth-bnb-panda-cake example is 4 separate reportable transactions and you’d have to report the gain/loss on each of them.

    @PaulKemp’s message about losing keys was said in jest. There are plenty of crypto surveillance companies and the exchanges report transactions and user information to the IRS. I’d say good luck to anyone thinking they can trade in and out of all this stuff without paying short term capital gains.
     
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  19. Penguin The Duck

    Penguin The Duck Well-Known Member
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    have you claimed any losses or gains on your returns to date? Want to walk us/me through that process?
     
  20. Oranjello

    Oranjello Well-Known Member
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    For the record, this is all wrong. Not attacking you Penguin The Duck , I just wanted to make it clear for future readers that the above is not how it works.

    For federal tax purposes, crypto is the same as if it were property (e.g., stock or commodities like gold). Thus, you do take into consideration each conversion from one to another (and pay tax or report loss each time) in light of the beginning and ending balances. For example, if you buy $100 of ETH, convert it it to $120 BNB, convert that to $110 of PNDA, then convert that to $140 of ETH, which you then cash out for $135, you pay tax on the $20 of gain from ETH to BNB, net the $10 loss from BNB to PNDA, and then report the $30 gain from PNDA to ETH, and net the $5 loss from ETH to cash. $20-10+30-5=35 taxable gain. It’s more complicated than the foregoing, but that’s the gist.

    Also, the IRS website is somewhat helpful but it won’t help you prepare your own tax returns: https://www.irs.gov/individuals/int...ed-questions-on-virtual-currency-transactions
     
  21. Oranjello

    Oranjello Well-Known Member
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    When it comes to FIFO/LIFO, I think, like stocks, you can choose to report one method over the other, which is pretty beneficial. This is not something I’ve done personally and it’s been a few years since I studied that in school, so not 100%, though.

    If you want to further research it Penguin The Duck , you’re looking for “recognized gains” not merely realized gains. Subtle but important difference under the code
     
  22. Oranjello

    Oranjello Well-Known Member
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    I’m not an AML attorney so I don’t know the extent of financial institution/KYC/AML reporting to the feds, but I don’t think we’re to the point of exchanges reporting transactions to the IRS - yet. I posted a case here within the last month or so about a US District Court enforcing an IRS subpoena against Poloniex’s parent company seeking user and transaction information. As of the date of posting, that was only the second instance of transaction info being sought (and presumably obtained) by the IRS (other than Coinbase from ~2016ish, which was widely reported), so, unless FinCEN is receiving transaction info in addition to KYC info and Treasury is passing it along to the IRS or the exchange is voluntarily providing that info to the IRS without asking, then its unlikely the IRS has transaction level info at this point. Biden’s tax proposal last week mentioned increased financial institution reporting, so I’d expect this to change at least somewhat if tax reform legislation is passed.

    Nevertheless, a safe assumption would be to operate as if they do have the transaction level info and report accordingly, because the IRS is looking back several years when seeking the info.
     
  23. PaulKemp

    PaulKemp Well-Known Member
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    This example is exactly why I learned to stop caring and just buy/sell whenever it made “sense” to. It was always going to be a complicated tax problem after getting my feet wet figuring out the space. And I’ve learned a lot by doing so.

    Unless you entered really early in this run, are you really planning to hold any of this stuff through Dec 31? Or avoid swing trades during it?
     
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  24. Oranjello

    Oranjello Well-Known Member
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    I started DCA’ing last March, so the FIFO/LIFO issue crossed my mind a few days ago and I haven’t really thought through it but it did give me pause before gambling it all on dex.

    As to the swing trading issue, personally I over-withhold on my W-4 to (hopefully) account for at least some of the gains when it comes tax time, since I agree taking taxes into consideration for each trade is generally a waste of time. Over withholding at least helps offset any surprises.
     
  25. burnttatertot

    burnttatertot Super Necessary
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    It's time you criminals started paying your fair share of taxes. :rain:
     
  26. PaulKemp

    PaulKemp Well-Known Member
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    Good stuff and thanks

    I'm assuming you're referring to March of this year? I started exploring in Feb (with money). The good projects are simultaneously undervalued and overvalued from that entry, imho. It's an uncomfortable position, and I want the freedom, psychologically, to bail if needed. If I'm worried about taxes, I could easily hold on too long
     
  27. Oranjello

    Oranjello Well-Known Member
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    Sorry, March 2020 - when the stock market tanked. Fair amount of gain on some BTC
     
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  28. kennypowers

    kennypowers Big shit like a dinosaur did it
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    Buy at the top and panic sell the pull backs so you don’t owe any capital gains like me

    upload_2021-5-5_8-25-16.gif
     
  29. user15000

    user15000 Well-Known Member

  30. user15000

    user15000 Well-Known Member

    Convo with the CEO

     
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  31. user15000

    user15000 Well-Known Member

  32. southside

    southside Well-Known Member
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    Yep this is my understanding of everything.

    The only event in question, is if you deposit your BTC and get WBTC back to use on ethereum, is that a taxable swap event, or is it classified as a deposit since they are custodians of your BTC? There are arguments on both sides right now, it's really how conservative you want to be. I'm not accountant though so that's about as much as I can explain.

    Also, your daily yield from BAO is income, and taxed at the price each day when you receive it. It's not only taxed when you decide to sell at whatever point.
     
  33. Penguin The Duck

    Penguin The Duck Well-Known Member
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    The question being debated on BAO now is whether the locked yields are taxable income now, or when they get unlocked a year plus from now. The locked value now will be nowhere close to the value when it's unlocked.

    And if I'm claiming the unlocked BAO or PNDA yields as income, and then swap and add to a liquidity pool, is that also taxable? It gets really fuzzy and confusing at this stage. And also impossible to track without having a pretty lengthy spreadsheet.

    Even checking the IRS website for the first time in a few months, there's a ton of new information and it still leaves lots of questions than answers. Just like the BTC to wBTC point. Appreciate you Oranjello chiming in though <3
     
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  34. southside

    southside Well-Known Member
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    Ah yeah. Sounds like RSUs vesting. At least that’s the argument I would try to make
     
  35. FourClover01

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    Is ADA going to power through the 1.50 mark finally? It has hit that resistance a few times, we need a breakout.

    Also, looking to buy 1K of another alt going. Debating between, Litecoin, LINK or Uniswap? Where should I stick my money?
     
  36. user15000

    user15000 Well-Known Member

  37. PaulKemp

    PaulKemp Well-Known Member
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    The way Robinhood derivatives keep going off, probably stupid fucking BSV will 20x tomorrow

    Edit: On a serious note, I'd like to put a huge chunk into SRM during the dip last week (I didn't) but would still feel really good about it today (feeling lazy, and its not one-click). southside agree or no?
     
    #14488 PaulKemp, May 5, 2021
    Last edited: May 5, 2021
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  38. FourClover01

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    I had a small stock fund going on Robinhood. Then all the shit went down with AMC and them governing the trading, I decided to sell all my stocks and move it over to Fidelity. At that very time, Doge was going through that first pump in February from like 1 cent up to 8 cents. I put all my funds into Doge for the F of it at a dollar-cost average of 5 cents. I haven't touched my Doge and wow it has been an interesting past 2 weeks :prawl:.

    I won't ever put another dollar on Robinhood, other than watching my Doge bag do fun things.
     
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  39. southside

    southside Well-Known Member
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    It’s erratic as hell so hard to get the odds in your favor. Possible it’s just retesting prior ATH here and is ready to leg again.
     
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  40. HuskerInMiami

    HuskerInMiami Well-Known Member
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    Why is BCH up almost 50% today. Same as ETC...and BSV

    are the rich trying to troll us into investing in them?
     
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  41. Arrec Bardwin

    Arrec Bardwin He ain’t me, he can’t be me
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    Robinhood
     
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  42. HuskerInMiami

    HuskerInMiami Well-Known Member
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    They got listed today on RH?
     
  43. PaulKemp

    PaulKemp Well-Known Member
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    Nah. Check the charts for the Robinhood listed coins starting on/just before the Coinbase IPO date -- Apr 14
     
  44. Brocktoon

    Brocktoon Well-Known Member
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    Saw that the top Doge wallet holds over 28% of the coins and is worth over $22 billion. Overall there are 15ish wallets holding over a half billion dollars. Have to wonder what they are holding on for.
     
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  45. PaulKemp

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    Obvious in hindsight. Hate myself for not realizing it the second my boomer co-founder who loves trading options was like, "Dude, I'm going to buy a bunch of that doggy coin on RH" a few weeks beforehand. Pretty sure he didn't because of all the FUD I threw at him. Feel shitty for that as well
     
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  46. seanofthedead86

    seanofthedead86 Well-Known Member
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    A buddy at work told me his uncle has around 9 million DOGE and his average buy is well under a penny and refuses to sell.
     
  47. HuskerInMiami

    HuskerInMiami Well-Known Member
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    I haven’t had RH since they pulled their shenanigans.
     
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  48. Chumbolone

    Chumbolone Well-Known Member
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    I’m not even sure otc could offload 1% without crashing it.
     
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  49. HuskerInMiami

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    How long have they been holding?