I owe the IRS $50k that I never actually received because I traded altcoins last year and didn't realize I had to pay...

Tired old larp

This.

Entire thing sounds like bullshit. IRS isn't above this kind of stuff when it comes to scaring people into paying taxes.

Don't declare trades on non us exchanges like binance or bitmex. The IRS don't know about them.
IM in Aus and im only declaring my btc/AUD trades because that's all the ATO know about

You retarded pieces of dirt. Read the 3 sections of the IRS guidance I quoted.

Especially the last one. Keep in mind that all virtual currency is property.

"If the FAIR MARKET VALUE of PROPERTY received in EXCHANGE for virtual currency exceeds the taxpayer’s adjusted basis of the virtual currency, the taxpayer has taxable gain"

Does it say if you trade it for USD? No, if you exchange it for property, and the fair market is greater than when you bought it, you owe money.

...

they don't care as long as they make money off of idiots

thats the kind of thing they have been waiting for before buying back in. Get them all to sell out of despair, then scoop it up.

And they wont even scoop it up and push the price up, they will go OTC before doing anything

you don't bro taxing on unrealized gains is only going to fuel the entire fundamental purpose of crypto. god this meme is retarded.

Once IRS accept BTC payments you maybe point
But till then you argument as retard as IRS taxing WoW AH transaction

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You don't. OP is larping. If you never cashed out to USD you owe nothing.

The IRS is talking about buying things with crypto, not trading.

For trading income you can use like kind, so you can consider all crypto a single asset. So crypto to crypto is not a taxable event. Crypto to USD or crypto to buy things is a taxable event.

But this is changing for 2018. So in 2018 if you trade alts every trade is taxable. Even then you can just not report it. Later on if it recovers and you make gains you would just pay income tax on the whole amount as you just won't be able to prove your cost basis.

first if you declare every trade like that you are a fucking idoit. buy btc and take your shit to a chink exchange do your trade or whatever then bring it back to coinshit to cash out.

LOL FUCKING AMERICANS

This is my my trade pattern. Is it retarded?

Honestly the IRS can go fuck themselves.

Their policies make no sense. Crypto is being treated as both a currency, property, and equity for tax purposes when it best suites them.

Most people aren't reporting shit until they cash out. And there is nothing the IRS can do about it.

this is a great idea
do it alot
everybody else is doing it

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What do I do if I am running an arbitrage platform that makes 30 trades a day. The paperwork I will have to fill out will be immense.

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idk im going to do it when i have a decent amount of money. Wich, they way the market is looking is going to a long time from now. Im not going to pay taxes on shit coins sitting in an exchange. That's fucking stupid

Yeah dude totally, last week I gave my friend 3 oranges and now I’m setting up a payment plan for the $800 I now owe on the USD value of those oranges.

that's why I didn't make any trades after my crypto went x10+ until january

30 trades/day is nothing. Software can easily do that. But the IRS doesn't give a shit how you do it because the burden of proof is on you to prove your cost basis for every trade so when you cash out you don't have to pay double tax on your principle.

please explain how this is possible. you cannot owe on unrealized gains when you haven't cashed out to fiat. if you're talking about capital gains on alt-alt trades, you would also have losses because the value of the coins went down. nothing about this post makes sense.

How do you simultaneously say that if you buy "things" with crypto you owe taxes, and then say you only owe taxes if you cash out for USD? The IRS says if you exchange it for PROPERTY. Is crypto property? Yes. Here's what Cross Law Firm, the most experienced firm in crypto taxation says:

>Every single exchange of virtual currency is a taxable event — whether to buy a cup of coffee or exchange one type of virtual currency for another. Not just transactions where it’s sold for fiat.

Like-kind has NEVER been approved for crypto to crypto exchanges.

it does because tax years, imagine you buy a shitcoin for $1k early in 2017, you trade it for $100k worth of another shitcoin still in 2017, now you're in 2018 and your shitcoin is only worth $10k, you have $99k taxable gains from previous year that you cannot offset with $90k loss from 2018

If you bought at the start of December you can't write it off at it's current price. You have to do it either at the market price at the end of the year (a fucking shitton) or the price which you last traded (still probably a shitton)

What happens when your gov makes a deal with Binance to get their records? That could easily be a requirement to continue operation.

It doesn't have to be approved. Everyone is using like kind for crypto.

This makes no sense. This doesn't happen with stocks, or any other asset really.

It makes sense when alts and Bitcoin went up hundreds of percent in 2017, but then crashed 75% in 2018. The gains were in 2017, which he owes taxes on, the losses are in 2018. So many people are going to get fucked because of this.

You havent KYC on binance, they only have ur email address and crypto addresses

all of this shit dumped at the most opportune moment

>being this stupid
>roleplaying someone this stupid

Gee user, you sure don't value your time do you?

So glad I live in a country with a much weaker tax office. God bless Australia

As of right now, you only need to give your ID to Binance if you want "level 2" verification. The only benefit of level 2 verification is being able to withdraw more than 2 BTC per day. So just don't do level 2, and withdraw your BTC slowly, then use an account not actually registered to your name.

Problem solved.

Yeah it does. It happens with everything. In stocks you just see the fiat value in your account before trading it for another stock, and if you're smart you put aside money for taxes when you see the money in your account. In reality that's what we should all be doing when we are trading.

that's exactly what happens in stocks, you can carry your loss to forward years and only partially, not to previous years
imagine you're trading coin to fiat (which really is the same thing since crypto crypto is taxable)
you buy shitcoin for $1k in 2017, sell it for $100k in 2017 and rebuy it again with the whole $100k still in 2017, now you have $100k worth of shitcoin and a realized gain of $99k, next year ticks and your shitcoin loses 90% of its value, but you cannot use new years loss to offset gain from previous year

That is because you trade back for USD before you buy another stock.

You never cash back with crypto-crypto. The policy is fucking retarded.

i want to know how op got to this point. what was his total volume of trades? obviously if you have a low cost basis of 1k and then you make 99k you're going to get taxed on it, if you sell. but if you didn't sell you aren't getting taxed on the gain because there isn't any. if your shitcoin drops to 10k you haven't realized a gain yet. how is this not clear to you guys still?

let me guess this straight -

>buy 1000$ worth of shitcoin#1
>shitcoin#1 goes up to 10,000$
>use 10k shitcoin 1 to buy 10k$ worth of shitcoin 2
>land of the free says thats a 9000$ cap gain

ARE YOU SERIOUS?

Why is it that its not when you cash out?

if shitcoin 2 drops to 500$ you should be reporting a 500$ cap loss. not a fucking 9000 cap gain if this happnes to me i ll literally shoot myself in front of their office

Cryto to cryto can be considered a like kind exchange (only for 2017), so there is no tax realization on the trade.

So what? The IRS doesn't shift through records of everyone with a crypto account. You can trade crypo without cashing out and the IRS will probably never know unless you trade enough to trip limits on coinbase (in which case you should probably know how taxes work).

And the IRS really doesn't care as when you cash out its on you to prove where your initial investment came from or you will be forced to pay tax on the full amount. For crypto this isn't so bad because the gains are so much. But still you are going to pay tax when you cash out, the IRS is really not going to invest much in forcing people to pay up front when there is much better things they can be investigating.

ITT people don’t know how taxes work and keep memes alive. You wouldn’t owe that much in taxes. In 2017 crypto to crypto wasn’t taxed. Done.

OH CAN YOU SEEE
BY THE DAWNS EARLY LIGHT

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yes you are being taxed on capital gains in this case because by trading you realize the gain. but what op is saying makes no fucking sense. this isn't how taxes work or how trading works. if you trade for a coin, it goes to 10k, you hold it through christmas, it drops to 1k, you still haven't realized a gain or loss because you haven't traded the coin again or sold it for fiat. it is that simple. the gains don't end when the tax year ends. you hold through which is how long term capital gains work. seriously biz is the most retarded place on the internet i swear.

But the crypto still has a fiat value, and in fiat value you still made a profit. It's kinda retarded but something we are going to have to live with. Especially if we make it big and actually want to cash out keep our profits.

Australia set up a specific task force to get people not paying their crypto taxes

this is also iffy at best, wrong if you're being conservative. and making everything like kind requires you to fill out a form for every trade rather than making a summary 8949 which you attach to your schedule d. bunch of larping faggots on this board have never traded or paid taxes on anything before.

Nope, nobody is going to pay for trade taxes.. IRS can go fuck themselves.

Tax only when selling to fiat is a convenient solution

Well that is simply the most bullshit retarded backwards dumbass fucking dipshit what the fuck thing I’ve ever read in my entire life

>Paying

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Yeah but they will never be staffed enough to track my binance trades. Im 100% reporting all my btcmarkets stuff

>make it big
>accept crypto-trading killing regulation that makes no sense unlikely to be enforced and can’t be sustained

i was just trolling you all

in canada you can carry back your capital losses for 3 years, so besides the arrears interest you dont technically owe anything

how the fuck is ur capitalism so bad?

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That's literally exactly how it works. If the year closes out with that gain on the books, there's nothing you can do to cancel it out. "Like-Kind" is a complete myth and NO tax accountant will do it.

OP probably traded using most of his portfolio for alt coins during his peak portfolio value in December, therefore triggering the capital gains.

>But the crypto still has a fiat value, and in fiat value you still made a profit

No, because there was no realized gain. If I buy something with it, or cash back to fiat then I made a gain.

IRS policies make no sense, they can go fuck themselves.

Next you are going to say hooker whore will have pay capital gains on cum swallowed because cum have fiat value

>If I buy something with it

The IRS fucking considers crypto as "something". Get over it.

USA ! USA ! USA !
kek

I imagine this is a pretty common situation actually, many people bought early/mid 2017 and were happily trading and unknowingly realizing their gains not leaving anything for taxes
this is very basic actually, each tax year is seperate

IRS policies are going to be struck down inevitably on account of them being fucking retarded.

So I can just wait until then, will happen this or next year.

Eh I just didn’t fill shit out because I didn’t realize any gains yet. I’ll wait till 2019 to worry about that. Irs is undermanned and if in worst case they come for my few $1000 then I’ll just pay it so I don’t go to ass ream jail. 2017 is fine though

>No, because there was no realized gain. If I buy something with it
Crypto is an asset. You've effectively sold one asset and bought another. 2 different stocks are not the same asset. 2 different crypto coins are not the same asset.

ok but traded to what? if he traded the coins that ended up losing value and isn't holding them then he would obviously pay capital gains but that would be completely obvious and fair and expected. he's talking about trading to a coin, having the coin rise in value, then lose all its value, at no point he trades the coin again, but somehow he's realized a gigantic gain. not how it works. he's holding that coin unless he sells it. and at that point if he sells at a loss it's a loss, which he can report. people aren't understanding this.

Me sold WoW gold for years and never for a once had pay taxes on each sell
I only ever pay taxes eoy capital gains

Well, that would be an incentive to form an LLC and operate under different rules, wouldn't it. Like real day traders do.

the chances are he traded his coin that mooned hard to buy another coin that dumped hard in 2018

He traded shitcoin1 to shitcoin2. He made a 9k profit on shitcoin1 and so this must be reported for tax purposes for the following year.

>It's kinda retarded but something we are going to have to live with.

They will have to learn to live with this not being taken seriously.

lol paying taxes on crypto
Don't cash out faggot

You can declare crypto to crypto as like kind. So in example, you can report its as:

>buy $1000 of cryptocurrencies
>your portfolio goes up to $10k
>trade stuff within your portfolio which is all not realization events because they are like kind exchanges
>2017 ends

You owe nothing because there is no realization event. Now if instead if you sold your portfolio for $10000 on dec 31 and bought it back jan 1, then it tanked to $1000. Yeah, you'd owe taxes on $9000 in income. But its unlikely the IRS would ever find out about it if you never reported it. Your only problem would be if you did cash out later on it would be difficult for you to prove you initially put in the $1000 and might have to pay taxes on that amount to.

in 2018 this all changes due to the tax bill that restricted like kind exchanges to real estate. Even then, the later still applies.

Lol it just seems like a lose/lose to ever even mention crypto what idiots

OP owes 50k in taxes. That means he made 100k on crypto at least. You didn't make 100k selling wow gold, just like your neighbour didn't make 100k selling lemonade on the side of the street. Don't be stupid.

>ok but traded to what?
To various shitcoins in the peak of the bubble with his whole portfolio, realizing out huge portions of "fair market value". In his original post he writes:

>Around December 2017, I got caught up in the altcoins frenzy and sold most of my bitcoins (about $120k worth) to buy a bunch of different coins

SHITCOIN HAVE NOT MONETIZE VALUE!!!
THAT WHY THEY ARE OF REGULATE SEC NOW
UNTIL YOU REALIZE GAINZ YOU PLAY WITH CHUCKY CHEESE MONEY

W/O SEC = CHUCKY CHEESE

4 YEAR OLDS NOT TAXED AT CHICKY CHEESES

his tax lawyer is terrible, it would be much better to hide his gains for now and try to recover with trading/bitmex or whatever and hopefully gain enough to recover, otherwise declare bankruptcy because bankruptcy in usa is very debtor friendly

Only if you have some way to cash out meaningful amounts tax free.

If you plan on paying taxes when you cash out to USD it is beneficial to report everything unless you don't care about paying double tax on your initial investment.

this dude is going to kill himself when cryptos moon Q2, fuck.

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You can claim capital loss. What the fuck is that guy doing?

I MAKE WAY MORE THEN 100K
Fuck you all!!!@!@

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right, which is a loss. it would even out in the end, possibly coming out in his favor if he is in the hole and his losses are large enough. again i don't believe anyone here has actually paid taxes on crypto or they'd know this situation isn't possible.

That is not how it works. I can pack dirt into my bag or farm CounterStrike skins. I don't owe the IRS anything for it, unless I sell it for USD.

You pay taxes on Stocks when you cash out or buy another stock. This is special because stock-stock transactions are actually stock-usd-stock transactions. You cash out, make a gain, and therefore owe taxes.

kek'd

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Not anymore apparently. Its pretty funny that gamers seem to be in completely in denial when this topic comes up. But its actually no bullshit a real issue now.

I'm not sure if you are trolling me or just a brainlet, but this situation is very possible due to distinction of tax years, realize gain in 2017, realize loss in 2018. You have to pay tax on 2017 regardless of what happened in 2018.

exactly. if you use any tax software or sites like cointracking you'll see, even using fifo, that you end up with a net loss if you ultimately dumped out during the crash. you input your full trade volume, your cost basis, and your gain. then it adds up everything and you figure out if you have a loss or not. you can claim a loss. i don't know what this retard is doing.

I don't get it? How can you be this retarded. You were explained to multiple times in very simple terms that if the tax year ends with a gain and then you make a loss the next year, it doesn't cancel out the previous years gain. Try it in your tax software.

you don't realize anything if you haven't traded or sold the coin to fiat. if you simply traded for a coin that you "bought" 1k of, and then at the end of 2017 that coin's value rose to 100k, you never touched it, then in 2018 the value plummeted, you are not "realizing gain" during 2017 on the coin. you report your trades that you realize a gain or loss on, you don't owe on coins you haven't touched. how the fuck do you think stocks work for long term capital gains? you think every year you automatically close out all your trades and realize massive losses? and i'm the brainlet?

it's pretty obvious that he realized gains in 2017 and realized losses in 2018, what the fuck is so hard to understand?

>You didn't make 100k selling wow gold, just like your neighbour didn't make 100k selling lemonade on the side of the street.

Its a pretty big deal how much you make selling gold for games like WoW. 100k is very possible. They have people farming non stop for 24/7 and they make a lot of money.

Some CS:GO weapon skins go for 5 grand a pop by the way. Do a little research before you start yapping about how crypto and video game assets are different.

> you never touched it
are you dumb? it's pretty obvious that he traded with it in 2017 and unknowingly realized his gain in 2017, otherwise his post wouldn't exist

>you don't realize anything if you haven't traded or sold the coin to fiat

HE FUCKING DID TRADE. WITH HIS WHOLE PORTFOLIO IN DECEMBER IN THE PEAK OF THE BUBBLE.

Most people here did.

>ITT: a lot of the people getting letters in the near future.

It sucks, but pay your taxes. It’s not anyone’s fault you got high off of the 2017 mania and didn’t consider the legal ramifications of what was done.

>day trading
Imagine every trade as one more pile of dirt going over your shoulder before you stick the shovel in the ground once more.