Crypto and Taxes?

5 points by sirrele 8 years ago | 2 comments

Are you putting yourself at risk going with a currency exchange option such as Coinbase vs using an anonymous option (some Bitcoin ATM)? Does anyone have advice on how crypto relates to taxes in this regard?

celticninja 8 years ago |

Pay your taxes on your crypto gains. Its easy and painless (except maybe the giving away of the money). Trying to hide it is setting yourself up for a load of hassle, but if you dont want there to be a record then buy with cash of localbitcoins, you would need to ensure your lbc account is not linked to you and change accounts every few months, or find one local seller who you can deal with and use them with cash. There is no history and you could then just send the coins to a new address it would be possible to claim you only purchased them on the date they last moved. e.g. Buy on 01/01/2018, want to sell them in 2020, so on 05/07/2018 you send the coins to a new address and on your tax form claim they were purchased on 5/7/18 (at probably a higher price that you originally did) this would reduce your tax exposure illegally. You would also need to show some way of funding the purchase at that time, so withdrawing an equal sum of money from your bank account would help. However that is tax evasion and illegal everywhere.

Grasshoppeh 8 years ago |

You never disclosed a region, so here is information on the second part of your question for the united states.

There is a beautiful post on the /r/personalfinance reddit of just this topic, recommending reading it. It has tons of background information and relevant links to IRS documentation.

https://www.reddit.com/r/personalfinance/comments/7p9a2t/cry...

In terms of the IRS, they are saying this virtual currency is taxable any time you buy, sell, barter, or even mine.