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Tax on crypto curency


dinarham
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According to Bloomberg News ,  12/20/17  ,Bitcoin and other crypto currencies will now be paying tax {on capital gains?}  according to the new tax bill .Tax cannot be retro active ,but now they will have to pay their fair share .  This alludes to the notion that we will be paying tax as well ,which I will be delighted to pay ! 

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  • 1 month later...

There is nothing new about crypto now being taxed. Cryptocurrency has ALWAYS been subject to capital gains taxes. Also, the IRS has always had policies regarding gains on foreign currency, I believe if its over $250 your supposed to pay taxes ie you take an extended trip to Europe, you come back and your Euros have gained over $250 you owe tax. 

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Some info for you -  https://www.irs.gov/newsroom/irs-virtual-currency-guidance

 

Cryptocurrency is treated as property by the US IRS - so any time you make an exchange - even from one coin type to another - it's considered a taxable event. Only if you keep the coin for over a year can you do the capital gains - as I understand it.  

 

Not tax advice - just info.

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3 hours ago, legit said:

Tankdude..........if one can be taxed on the same money each time one transfers the same money from one coin to another is not good.  Kinda like double taxation ...right?

 

Basically crypto to crypto is not a "like kind" exchange so essentially when you swap Bitcoin for Electroneum for example you are selling Bitcoin and paying taxes on any gain that you saw at that time and then buying Electroneum and thats your new tax basis for the Electroneum. I wouldn't necessarily call it a double tax but you are sort of right in the sense if you dump all your BTC profits into ETN and ETN goes down you paid taxes on money you'll never see so IMHO it's important to take profits

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2 hours ago, numimaticmat said:

Basically crypto to crypto is not a "like kind" exchange so essentially when you swap Bitcoin for Electroneum for example you are selling Bitcoin and paying taxes on any gain that you saw at that time and then buying Electroneum and thats your new tax basis for the Electroneum. I wouldn't necessarily call it a double tax but you are sort of right in the sense if you dump all your BTC profits into ETN and ETN goes down you paid taxes on money you'll never see so IMHO it's important to take profits

good answer - and that's basically what the IRS is saying. This is going to be one of the biggest hurdles to cryptos being used as a "daily currency" in the US. Lets say if i go to Starbucks  and they have started taking Crypto for payment.  I buy a Venti Skinny Cinnamon latte. That is considered a taxable event. I use Reddcoin to buy a rug at Overstock.com (which you can do, BTW - They are taking a number of Cryptos) that is considered a taxable event.  

 

 There was a portion of the new tax rules that were just passed that was going to exempt any purchases under $600.00 - which is how fiat currency is currently treated - but it was removed from the final draft and what was voted in. 

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