I bought ETH around 3 years ago, putting in ~5k over the course of the year, and have held since then. A few days ago I jumped on the surge and sold for ~10k, which I have not moved from my virtual wallet. I am planning on buying back in during the next decent dip with that same money then likely holding throughout the year. In that scenario an i going to be paying long term capital gains on the ~5k profit? Or since I'm reinvesting it later can that be offset?
Crypto to crypto trades, tax implications, and forced liquidation.
I'm wondering if any CPAs or other tax professionals out there can clarify something for me. My understanding is that crypto-to-crypto trades constitute a taxable event under the US tax code. If I am not sufficiently liquid in fiat to cover the cap gains on the profits realized on a crypto basis, am I forced to liquidate a portion of my crypto position in order to cover? I assume that the IRS would say "We don't care which assets you have to liquidate in order to cover the tax, we just want our fiat." Just the same, no matter which asset I choose to liquidate, aren't I being forced into a secondary regime of taxation (i.e. gains on assets liquidated solely for purposes of paying off the tax man). And then what if again I am not sufficiently liquid in fiat to cover THAT tax bill. Rinse, repeat ad nauseum. Do I really need to (in calculus parlance) "take the limit as taxable gains go to zero, of all forced liquidations required to cover the original crypto-to-crypto p&l gains?" Edit: I have paid taxes on crypto-to-crypto trades for years. This is just the first year where I may have to consider forced liquidation. The focus of my question is directed towards any specific IRS rules on forced liquidation. I'm not trying to debate whether or not taxation is theft (it is theft, but I'm not fighting that fight).
Is the new crypto to crypto trade tax being applied twice when we cash out?
Say I day trade and I trade BTC coin to another - like say LTC. In a few months, LTC goes up in value and I do notice the profit gained and report it on my taxes next year cause it's a taxable event. When I decide to cash it out on coinbase into USD, I report that profit again, so wouldn't this considered a double taxing on the same profit made?
Crypto to Crypto day trade - calculating UK TAX questions
Could someone please answer my questions on crypto to crypto trade tax (assuming 20% tax on gain for simplicity)?
Tax calculation: (Using $ as example currency) Transaction 1 (14:00): Sold 1 BTC for 5000$, bought 1 ONT for 5000$ Transaction 2 (18:00): sold 1 ONT for 5500$, bought 1 BTC for 5500$
Tax: 20% on 500$ = 100$
Going on: Sold 1 BTC for 5000$ Lost 500$ and back to initial 5000$
Question 1: is tax 0$ or 100$ ? Question 2: For calculating BTC price can I take avg day price or price at transaction time (14:00, 18:00) (instead getting BTC price for each transaction...)? Question 3: what if Transaction 2 happens next day? Should I take BTC price from next day instead?
Transaction 1: bought 1 BTC for 5000$ 100 Transactions during the day (10:00 - 22:00) (no gain, no loss, no fee): BTC->ONT->BTC BTC->ETH->BTC Transaction 102: sold 1 BTC for 5000$
Question 4: Is tax = 0$ ?
Transaction 1: bought 1 BTC for 5000$ 100 Transactions during the day (10:00 - 22:00) (some gain, some loss, no fee): BTC->ONT->BTC BTC->ETH->BTC Transaction 102: sold 1.1 BTC(all) for 5500$
Question 5: Is tax = 100$?
Transaction 1: bought 1 BTC for 5000$ Transaction 2: (tax year 2017): sold 1 BTC for 105,000$ Transaction 3: (tax year 2018): bought 1 BTC for 105,000$ Transaction 4: (tax year 2018): sold 1 BTC for 5,000$
Tax (tax year 2017): 20% on 100,000$ = 20,000$
Question 6: Tax (tax year 2018): lost 100,000$ and ?
Deposit 1000$ to exchange in 2017 Withdraw 5000$(all) from exchange in 2018
Question 7: Can just declare that 5000$ gain in 2018 and pay 20% tax on it?
Tax Calculation example:
(Assuming answer to Question 2 is YES) Having 200 day trades (BTC to 10 different crypto and back to BTC) 100 * BTC->ALT->BTC: sum of BTC value in $ before buying ALT = 20,000$ sum of all ALT value in $ before buying BTC back = 21,000$ at the end all funds are in BTC
Tax: 20% on 1000$ = 200$
Question 8: Is this calculation correct (more or less...) ? Question 9: At the end of 2017 tax year all funds are in BTC (not realised gains), should I pay any tax at all?
Calculation of tax for each transaction is really confusing, could someone point to the place where this is explained with details (high number of transactions, many different ALT coins involved).
Let's look at this example: "Let's say Sienna purchased 0.1 Bitcoin for CA$1000 in August 2017. In November 2017, she exchanged 0.05 Bitcoin for 2.1 Ether. On the date of the transaction, the market value of 2.1 ether was CA$1500. This means her capital gains would come to CA$1000 as the cost basis would be CA$500. Once again, 50% of the total gains or CA$500 would be added to her taxable income and she would have to pay tax as per her income tax slab." But that means Sienna in this case still does not have any realized gains, so that means she would have to sell some of her coins by December 31st, essentially cashing out to fiat and getting taxed again? What happens if by Dec 31st she did not cash out anything to fiat and ETH went to zero? And if Sienna does not want to sell her coins after that BTC -> ETH, then CRA is assuming that Sienna must pay out of her pocket?
Is there a crypto tax software that tells you in real time whether a trade will be taxed at short or long term capital gains?
Is there a crypto tax software that tells you in real time whether a trade will be taxed at short or long term capital gains? This plays a huge factor in whether or not a trade is worth it, especially since buying an alt with btc counts as selling btc, but with my current software I don't find out until when I do my taxes.
Crypto tax question - day trading or capital gains?
Hey, so currently I am investing in crypto. I understand that if I bought it last week and sold it now for a profit, that would be capital gains tax. But, lately I have been doing a few transactions a day - selling high, and then buying back when it’s low, and selling when it’s high again. In the same day. Since it’s crypto, would this count as day trading and be taxed differently, or is it all still capital gains? On CRA’s website all I can see is that crypto is taxed as capital gains. If it is considered day trading I would not be eligible for cerb as well. Thank you!
Hello guys, I am filing my tax returns using Credit karma. I have traded small amount of crypto currency in 2019. Please note that, I bought, converted and sold the crypto coins. I did not mine them. To report the crypto transactions, I have recorded all crypto transactions in my 8949. Similar details are reflecting in 1040-Schedule D form. My questions are - 1. Do I need to fill any other forms apart from above mentioned forms ? 2. Do I need to file 1040-schedule 1 form to answer Crypto income question, even if I don't have any other income ? Thanks in advance.
The reason that buying and selling crypto is taxable is because the IRS identifies crypto as property, not currency. As a result, tax rules that apply to property (but not real estate tax rules) transactions, like selling collectible coins or vintage cars that can appreciate in value, also apply to bitcoin, ethereum, and other cryptocurrencies.. To no one’s surprise, the IRS isn’t kidding TokenTax supports taxes for crypto margin trading. File crypto trading taxes for exchanges like Bitmex, Poloniex, Deribit, Bybit, and more. Many exchanges help crypto traders keep all this information organized by offering free exports of all trading data, which an accountant (or a diligent enthusiast) can use to determine their tax Trading with stablecoins. Stablecoins are also cryptocurrencies and taxed in the same way as any other crypto to crypto trade. The benefit of stablecoins is that as long as its price doesnt deviate from $1 you wont have to pay any additional capital gains taxes when you trade the stablecoin for some other crypto. Crypto Trading Taxes in Indonesia In June this year, the Central Bank of Indonesia declared that cryptocurrencies are part of the commodities classification, under the Indonesian financial laws. It means that, rather than a legal tender, it is an asset that can enter the trade markets and carry taxes accordingly.
How to Calculate Your Crypto Taxes - CryptoTrader.Tax Demo
DISCLAIMER: I AM NOT A TAX PROFESSIONAL, PLEASE DO YOUR OWN RESEARCH ON THIS IMPORTANT TOPIC! Many people have been wondering how their crypto transactions/d... *Demo begins at 3:08 This video walks through the CryptoTrader.Tax platform. In this demo, we are walking through the flow of a user who has traded on Coinbase, Binance, and Poloniex. For a ... PLEASE NOTE: In consideration for producing this media with Crypto Trader Tax a generous contribution in the amount of $600.00 USD was made by Crypto Tax Trader to support the CryptoWendyO channel. CRYPTO TAX CRACKDOWN 2019 - TAX EXPERT EXPOSES IRS METHODS - Duration: 32:27. Ivan on Tech 20,598 views. 32:27. CryptoTrader.Tax How to File Taxes for Cryptocurrency Trading - Duration: 22:33. Will Wright from Mining Store & Adrian Forza from Crypto Tax Australia break down the complexities of taxation in the cryptocurrency industry and make it simple for the every day user to understand.