Each crypto to crypto trade is a taxable event, in which you need to calculate the fair market value of the transaction

>Don't daytrade.
>Figure the cost in fiat of the first crypto you purchased (with fiat) at the time you bought it. This we will call "cost-basis."
>Figure the price in fiat of the second crypto you purchased (with crypto 1) at the time you bought it. Subtract cost-basis from this. The result we will call capital gain (if positive) or capital loss (if negative)
>report the capital gain/loss on the appropriate forms and do whatever calculations the instructions prescribe to figure tax burden or deduction.

This is really not that fucking hard as long as you follow step 1. If you don't follow step 1, then you will have a lot of spreadsheet work ahead of you.

step 1 sucks, i want my freedom back

Freedom ain't free. The tree of liberty must be watered with the 500-page spreadsheet ledgers of patriots.

>It seems like the IRS will try to fuck you on this
You're going to pay the applicable income tax rate with a zero cost basis. The whole point of keeping up with your trades is to qualify for capital gains rates, and only pay on your gains.

>The tree of liberty must be watered with the 500-page spreadsheet ledgers of patriots.

Print out the transactions for every wallet you ever owned. There you go IRS have fun.

Record every single trade and then hand the IRS a booklet 500k pages thick and tell them to go fuck themselves

I don't see how they will care until I cash out to buy a condo in a couple years. I'll just be sure to take out an extra 30% of condo's cost to cover a shitcoin tax specialist and do amended returns for the last few years. It's too damn complicated for them to expect anyone to even try to pay taxes on crypto to crypto before they start to take profit. Honestly they should be grateful they get anything at all. I find the jewest msot shady guy ever too. With some creative accounting my tax bill will hopefully be marginal compared to the sums I bring in. If they make it too much trouble I'll just have to move to a freer country, like North Korea. Kikes better learn not to bite the hand that feeds.

Is “converting” on Coinbase the same as a trade? Please no bully

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Be careful though because under the actual definition a lot of the dogshit like USDT isn't actually a cryptocurrency because it is controlled by a central authority. The cucks at the IRS haven't fucking updated their definitions. One could honestly maybe even get fucked for converting GP to Tokkul in RS because it is technically a digital currency with a USD value.

Call your congressional representative and tell them to vote for the Token Taxonomy Act. Look it up. It's incredibly favorable for taxes.

1031 like-kind exchange status for crypto. Meaning, not taxes on intra crypto trades. Only when you cash out to fiat, which makes it much easier to qualify for longterm capital gains.
Even better, it has a retroactive effective date of Jan 1, 2017. So, if you didn't properly report your taxes, it's cool. Just pay capital gains when you cash out.
If you did pay taxes on crypto-to-crypto trades, you'd be due a refund.

You can so what I do and buy high and sell low so every trade is a loss and you pay no tax on it anyways so they won't care and you got no gains that it could offset so why even report it.

Your tax burden is on net gains. Losses offset your gains. If you had a net loss, you can report your loss, and offset any future gains up to $3k per year, I think.

>Only when you cash out to fiat
What about say, swing trading, where you aren't technically 'cashing out' as in the money is being deposited to your bank account, but rather you are getting credited with "account dollars" inside the trading platforms? Seems to me like it should work this way:
>deposit 5,000 dollars to coinbase
>after 5 years of holding and swinging various shitcoins, withdraw 5,000,000 dollars
>pay the crazy 30-40% tax on that amount, with no consideration for when you swung, traded, whatever

You probably lost money since the start of 2018 like a majority of the retards on this site. You'll likely not owe any money to the IRS.

Not necessarily. If he sold for huge gains in 2017, then traded it away, or lost it in 2018, then he'd owe a large tax burden for 2017. Not the IRS's fault he irresponsibly lost his tax burden reinvesting it in 2018. He could report a $3,000 loss in 2018, and the rest could roll forward each year for $3,000 per year, but he'd owe the 2017 tax.

What are "account dollars?"
If you're trading from BTC to USD on Coinbase, that's fiat. I don't know if there's a 40 day grace period, like other 1031 exchanges. BTC to USDC and back would be 1031, and wouldn't trigger tax until it's sold to fiat. Trade BTC into alts and back as many times as you want.
It's actually enforceable. The IRS knows they can't enforce the current law adn they need a more practical one.

>buy shittons of online gift cards using whatever crypto they take
>use cards to buy gold online
>hold gold for a year
>sell gold or hold some to use for bartering
What's stopping me from doing this?

Imagine for a moment you are an IRS agent, a proud American Patriot who takes their job seriously. You show up to work, an eagle soaring over your head as you enter the Federal building. You check the headlines "Bilionaire Epstein raping kids on a tax evasion island he transports the most connected American politicians and elites to and from, will there be justice?", you laugh slyly as you down your bottom barrel preground coffee sludge as you check your 401k and pension statements. "Only 35 years to go until I can retire, that'll be the day". You realize you forgot to pay your mortgage to your bank which launders cartel cash and shorts your mortgage in a derivative you need two PhDs to understand as they structurally attack the economy and destroy the standard of living for hundreds of millions of workers. You then realize you forgot to pay your child's rent in a university town house owned by a foreign tax evading money laundering Chinese national who has three children conducting industrial espionage financed by the CCP. You turn on your 2009 iPod touch and navigate to your Journey Greatest Hits playlist, Bose comfort headphones adorned you click play and assess your task for the day, "Follow up on NEET who made inherited 40k from deceased relative and owns 32k of cryptocurrencies from hundreds of trades". Yep. it's boomer IRS time USA.

I never sold at the top. I just kinda held as it kept dumping. I still made gains though. Just not a huge amount. Problem is, I am super down on my luck and pretty much destitute at this point. So even if the IRS came after me for a couple grand I would be fucked. Shit simply did not pan out for me even in spite of the fact I didn't really do anything over the top stupid.

I essentially have one last chance to get on my feet and if that doesn't go well then fuck it. My coins die with me. Nobody gets shit.

You don't. You open an account in a third world shithole or fiscal paradise and cash out there.

Yes.

you people are retards

you never cash out, you borrow USD against the crypto you have, pay a small amount of interest, you technically lost 100% of your initial fiat investment and your net worth is somewhere in the negative millions

Can you explain this a little more in-depth? How can I fuck the banks at least as hard as they fuck me?

kekd

>borrow USD against the crypto you have
Wait, is this possible? Does anybody give loans with crypto as collateral?

(I kinda think you're trolling, but I dunno)

you don't. they will never get exchange / DEX trade data.

buy $OTO.

>1) Determine the price/cost you paid, when acquiring acquiring a coin

>2) Find market value of the coin you're selling, at the moment of the sale

>3) If the difference is a gain, pay
>3.A) Regular income tax, if you held the coin for 3.B) Capital gains tax, if you held the coin for >1 year
>3.C) Offset your other capital gains with capital losses, if you lost money.

>4) When you sell/trade the coin you just purchased, use the figure you calculated in step 2, as the price/cost of the coin.

There's some more complicated stuff, e.g. FIFO calculations, if you've purchased the same coin twice.

In practice, coinbase calculates this for you, I think. (I've never used it personally)

what if you live in a shit third world country (Aka mexico) where crypto is barely even adopted?

holy kek. capped

You owe capital gains on the collateral. You thought they didn't think of this?

Not if you never realize your capital gains.

They're realised when the financier takes your collateral for not paying the loan.

He's obviously implying that you pay the loan off.

However, the problem is that crypto is super-volatile. And so a financier isn't going to be willing to accept crypto as collateral - you'll still get a super-high interest rate.

A better technique would be some kind of specialized derivative. But I doubt those are available to any ordinary user of crypto.

If there isn't any government agency to prevent it ... maybe you can avoid paying tax altogether?

Or at least interpret the tax laws in a way that is favorable to you.

There are companies that do crypto backed loans.

If you settle the loan in any way with crypto you will realise capital gains. The only way not to is use enough collateral to eat compounding interest rates to infinity which becomes much worse than paying taxes pretty quickly and impossible eventually.

blockfi.com
celsius.network
nexo.io
Those are off the top of my head. I'm sure theres more.

Just declare a shitton of capital losses

The entire idea of "loans paid in crypto" is stupid.

1) If you have the crypto to pay off the loan - why do you need the loan in the first place.

2) If you don't have the crypto to pay off the loan - what do you do if the price of crypto increases by 4x? Crypto is volatile. Often, you won't end up paying the loan.

So the person loaning you money, is unlikely to be repaid in crypto, if crypto does well. That's a bad deal for him. He'll only get paid if crypto performs poorly (or doesn't change).

I was assuming that the guy was talking about a fiat loan, with crypto as collateral. But I've never heard of that - and given how volatile crypto is, I doubt it actually exists.

or don't file like 99.9%

How can I take advantage of reporting losses if I haven't been keeping track of my trades? Am I just fucked?

>blockfi.com
Holy Shit.

If you put up a lot of collateral, they'll give you a 4.5% loan (for a term of one year). That could work.

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Declaring capital losses means you can carry it forward against your gains in future years tho

1) You need to find records of your trades.

2) If you don't have records, the IRS is likely to reject your claims of losses.

3) You can only claim losses in the same year that you claim gains. (there is a $3,000 caryover from year-to-year, I think, but that's the only exception I've heard of).

where you live maybe
I ain't paying shit

Meant for

Actual logic

Legally, you're required to pay taxes when you use crypto to buy gift cards.

I'm not sure they'd actually catch you. But personally, I wouldn't take the risk.

>sign up for a wirex card or any card that lets you withdraw money from atms from your erc20 adress
>don’t send any money to your actual bank, account, send the cryptos to several different user erc20 adress and then finally send it to your wirex adress
>withdraw the money in cash (unless you got mills)

If the money never reaches your bank account the irs wont know shit

Idk about USA but in Canada capital losses can be carried forward indefinitely for any amount

I know. It sucks. In the US, Capital loss is limited to $3,000 for individuals. Of course, I think our capital gains tax is lower, so meh.

Obviously, there is no limitation, so far as corporate taxes go.

investopedia.com/terms/c/capital-loss-carryover.asp

*Capital loss carryover is limited to $3,000 for individuals.

Wouldn't the ATM/Bank that's doing the erc20 -> Cash conversion, and the cash withdrawl, know your identity?

Banks have reporting requirements, and they might report it to the IRS.

Yeah but how can they prove where you got the money from? Could be your parents gift from few years back or some random story you thought of.

Im just throwing ideas around here

>Yeah but how can they prove where you got the money from?
The IRS has two standards of proof.

1) Beyond a reasonable doubt - needed for criminal convictions.

2) Preponderance of the evidence (in other words - 51% of the evidence is on which side?) - needed to make you pay more money in taxes.

Plus, if they suspect that you're evading taxes (and if they notice this transfer, they will suspect it), they'll focus a LOT of attention on you.

>Im just throwing ideas around here
A better approach would be

1) Do all your trading, never connecting your identity to your trades. Use TOR, figure out how to not use an exchange, or use an exchange with a fake ID, or something.

2) After you're done, turn all your coins into bitcoin.

3) Sell on localbitcoins, for actual cash, and never give your identity to the guy you sold to. Also, make sure he isn't a cop, (using methods to be determined later).

OR

1) Pay taxes. (recommended approach)

they will ask how you got the gold in the first place

Yeah paying taxes seems to a lot less to worty about.

What if you withdraw money from an atm in a different country where you‘re not living in? For the eurofags it would be rather easy, would those foreign banks bother giving info to others?

>What if you withdraw money from an atm in a different country where you‘re not living in?
Most countries have banking laws that require them to report all US citizen bank accounts to the US government. I know there are other "disclosure to the US government" laws, but I don't know the details.

The list of governments that refuse to cooperate with the US government is small, and shrinking. You're stuck with the Cayman Islands, and not much else. 20 years ago, you'd have a lot of countries to choose from. Today, not very many options.

the best is when you do your tax return money, and use tax return money to invest in crypto.
then you live poor for yars, and they tax your tax return money for 5x what you actually have.

so you invest like $1,000 of tax return money
then they tell you you owe them $20,000 in taxes from your initial $1,000 tax return.
and then they keep multiplying it..

and now you owe $14,300,000.00 in taxes
for investing $1,000 of tax return money...

and you live on $7,000 for 12+ years.

you don't, you buy $TRV and let the asians accumulate your wealth for you.

>Kek

All DEX data, like stuff on IDEX and binance, are public anyway.