Jow Forums I’m going to my tax accountant now to file for 2017, but I have a huge question: do I mention crypto at all? What if I want to simply ask if anyone’s come to them in regard to crypto investments, and ask how they handle it? If I say I’m invested but nothing other than that, do they have an NDA or can they tip the IRS?
I’m debating just filing normally as if my crypto doesn’t exist. I never cashed anything out, and never traded on cuckbase.
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IF you didn't cash out they have no reason to suspect you have crypto. You only get flagged if you get a 1099. if you have less than 100k I wouldn't bother paying taxes on it even when you do cash out. You're still small potatoes at that point.
Ask about as if you were interested in entering crypto. Don't give him reason to believe you already have.
See a tax attorney instead of an accountant. The attorney will take the approach of "Us vs. Them" instead of being an intermediary of you filing with the IRS and having some kind of ethical obligation.
You don't have to ask how they handle it, I'll tell you.
They have you report every single trade on 8949, sum up the long term and short term totals on Schedule D 1040, and have you pay on fair market value of gains, NOT on what you "cashed out". And none of them let you do like-kind for crypto. None of them. My accountant told me I owe $101,000 Federal and $15,000 State for 2017, then I have to make quarterly estimated payments in 2018 totaling $135,000. Then he said they're reaching out to the IRS to put a lot of their clients on payment plans because they don't have the money to pay it.
My tax return is 106 pages long.
And this is with the most expensive, "customer advocating" tax specialist I could find too. The first few I consulted wanted me to do FIFO which would have resulted in me paying $400,000. (From crypto to crypto trades)
serious question have you ever considered just not paying on crypto crypto (assuming you didn't trade on verified exchanges) and then cash out everything at once claiming it's coming from mining/donations years ago?
You technically can't claim it's from mining or donations years ago because you owe income tax on the fair market value in the year that you received it. The IRS guidance was applied retroactively in 2014 about that. And I did trade on verified exchanges. So I would have to monero out from the exchanges, then fraud a history of how I lost that money within the 2017 tax year so I didn't have to report a gain. Then when I cash out I would have to fraud a transaction history of how I gained all that money within the tax year I'm cashing out. In the end I decided I don't feel confident doing all that without somehow fucking up somewhere.
yea it's playing with fire. especially for people planning to cash out a large sum in the future, if I had like 20k to sell with no trade history on verified exchanges I would just sell that shit on local bitcoins
so if you mined bitcoin in december you would have tax debt in january? lmao
Why not just emigrate somewhere with non tyrannical level taxes?
ignore him. he's just a tax FUDer
so if you mined bitcoin in december you would have tax debt in january? lmao
Yeah?
>tax FUDer
Such a stupid fucking term. I started off in the beginning as "Devil's advocate" because I was hoping someone would prove me wrong so I wouldn't have to pay gigantic amounts of taxes on crypto to crypto, but no, I just realized that biz is just in denial of the facts.
Because...
I did my research on this shit. I looked at every avenue. Puerto Rico, Captive Insurance... it all turned out to be a meme.
Never underestimate the federal government's desire to get their hands on your shekels
>people still getting shilled into paying tax for 2017 when there were no laws on the books for it and there is literally no reason to unless you cashed out to fiat over 10k
Wtf they gonna do about it if you move all your crypto into monero then trade it on foreign or decentralized exchanges while living in Asia, Russia, Dubai, etc?
Property / barter tax rules were already on the books. The IRS came out in 2014 and clarified that virtual currency is property and should be interpreted like this:
irs.gov
>In general, the sale or EXCHANGE of convertible virtual currency, or the use of convertible virtual currency to pay for goods or services in a real-world economy transaction, has tax consequences that may result in a tax liability.
>For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency.
>For U.S. tax purposes, transactions using virtual currency must be reported in U.S. dollars. Therefore, taxpayers will be required to determine the fair market value of virtual currency in U.S. dollars as of the date of payment or receipt. If a virtual currency is listed on an exchange and the exchange rate is established by market supply and demand, the fair market value of the virtual currency is determined by converting the virtual currency into U.S. dollars (or into another real currency which in turn can be converted into U.S. dollars) at the exchange rate, in a reasonable manner that is consistently applied.
>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. The taxpayer has a loss if the fair market value of the property received is less than the adjusted basis of the virtual currency.
The only ambiguity was the use of 1031 like-kind deferral prior to 2018. You had to fill out form 8824 for every single trade and get it approved in order to have the deferral. Which I don't think you did. You just ignored everything.
why you say it turned out to be a meme. my cousin just came back from Puerto Rico. why cant you do it?
Because if you were a not a bonafide Puerto Rican resident and a US Citizen for any of the 10 years preceding the sale of your investment, it's not treated as income within the territory. Did your Cousin go to Puerto Rico to sell crypto?
No he did not. Just to scope it out and possibly get a place for the future when he cashes out there. No easier way to transfer wealth across boarders.
Were Canadians. dont know if we have a similar law.
this, CPAs can and will testify against you
How did you get around using FIFO? You have to do specific identification for other methods.
Well, you know just chance a run in with the IRS, but you'll love the penalties. Oh wait, they're overfilling the IRS from the tax bill? Your fucked user
you don't homie. capital gains is always calculated in fifo. any other way would not be logical
I had to shop around for a CPA that would do it. That's one of the only real gray areas because the guidance didn't say which method you have to use, just that you should identify cost basis "in a reasonable manner that's consistently applied." Also I had a portion of coins that I just had sitting in cold storage for a year, under FIFO, it would account for those coins as being "actively traded". He also had connections to ex-IRS people and tax attorney's that could back me up if the IRS decided to have a problem with it. Oh, and the 8949 is electronically filed and most likely a human will never see it. And even if they do, it's hundreds of pages of decimals and completely unintelligible because it has minimal information. Doesn't have any exchange information, doesn't show what coin you traded for, doesn't say explicitly what accounting method you used. We basically just thought there's a good chance I'll just get away with LIFO.
You... You know that it's not like magical thinking right. It's not fucking time travel accounting idiot
yeah FIFO is literally impossible with my trading patterns. Like, there's no way.
And there is literally nothing ANYWHERE saying that you have to use FIFO. There was a line in the 2018 tax bill requiring FIFO, but even that got taken out.
if the tax REFORM had a provision to require FIFO, then present tax does not require FIFO.
And that part got taken out, so future tax will not require FIFO either.
....wow, that sounds hard.
NOT
So you're basically fucked if they look into it deep enough and things go badly, but it's very unlikely.
Eh... well they have no legal precedent for telling me I have to use FIFO.
I should add, the only time FIFO is even the default method is with stocks and bonds. Property is not a stock or bond.
ignore everyone else in this thread.
do not listen to low-testosterone NEETS
the only thing you have to report are trades and cash outs on Coinbase and Gemini or any US-based service.
ignore your trades on binance or bittrex (don't use bittrex since it's US-based and don't do KYC there) since they cannot really verify what you did via email sign up.
that's it. AKA just report everything by US institutions that have all of your information. it was only gemini for me.
NO.
1. you're already paying your crypto taxes, they're not gonna check in the 3 years they have to do so.
2. they can't require you to do something without LAW. there is no law about FIFO with property.
3. literally anything else is irrelevant.
>capital no
confirmed, you are taking a risk and gambling they won't catch you and your reaction proves it
>do not listen to low-testosterone NEETS
thats right goys, dont listen to neets, get those taxes finished before monday starts, boss needs you bright and early so rest up
>commiting criminal tax evasion they can fuck you raw in the ass for anytime they want to
they'll be way to busy over the next 5 years going after people like
to bother trying to track your cost basis lot identification based on your wallet movements, etc, to extract the tax that they'll end up getting anyway when you do exchange your lower cost basis coins.
>capitalization psychology on Jow Forums is a legitimate indicator
You're a special kind of retard, aren't you?
My reaction is because it's incredible to me how fucking retarded almost every single human on this planet is.
Find your own answers. It has NEVER failed me.
t. been dissecting legal code since I was 11
>t-t-t-tther'es no way i'll get fucked and be in deep shit, i-i-i-i've made a-a-a-all the calculations!!!
It's hilarious seeing the panic even in the more advanced tax cheats.
The entire point of DLT is that it is public.
You bet your sweet ass they'll be coming after you, there's so much mney they will make fucking people like you.
you are hallucinating.
they will literally make nothing, there is nothing to "come after" me for.
>getting all defensive about his flimsy tax evasion on an anonymous thread on a cambodian boat repair imageboard
>not worried about the IRS coming after him
pick one laddie
you are literally referencing a law made specifically about STOCKS, BONDS, AND MUTUAL FUNDS. That law is about nothing else. Crypto is none of those things. Since you lack deductive reasoning, you are applying the only information apparent to you even though it is clearly irrelevant.
I'm done with you.
If you had to force crypto into an existing category, it would be a stock. ICOs prove this beyond the shadow of a doubt.
You are risking big fines and at worst, being assfucked by AIDs infected niggers in prison.
>newcoiner cuckolds fucked up and made lots of shorrt term trades instead of buying BTC, ETH and LTC years ago.
>they are damaging controlling their pitiful profits by trying to cheat the IRS with incorrect accounting methods
feels great to be an oldcoiner tbqh lads
don't be daft, even the IRS says that it's property, not stock
Hope you kept meticulous and detailed records and also specifically identified WALLETs which have the specific coins at any given point in time!
Oh.. you didn't? Because it's impossible?
time of the long dick of the IRS to claim your orifices
Lol, I literally did have a specifically identified wallet in my hardware wallet that I just HODL'd my long term bitcoins in, and a separate wallet that I sent to exchanges and never mixed them.
A shame that all those exchange coins have to be done FIFO and you can't mix accounting methods!
LITERALLY unless you only held BTC long term and _NEVER_ alt paired to BTC (e.g. bought into alts with ETH or BCH bought on coinbase) you cannot use lifo
Reality sure sucks doesn't it?
wagecuck detected
Holy shit do people really cuck themselves like this? Why the fuck would report $100k in crypto to crypto when you never cashed out? What are you scared of? They could audit you and see that you had $0 transfers to your bank account. Where is the risk? You literally set up a payment plan? Lmao, you rekt yourself.
There is no rule that a coin has to be in one wallet for it to be sold in another. You could argue a coin is not tied to a wallet. A wallet just entitles you to a certain number of coins. There is no law that defines that.
You can use any accounting method you want. And you can use it for different coins...
You didn't read my post correctly. I said other people were setting up payment plans. I cashed out nearly a million in January.
Yeah I know that but even with this made up requirement:
>Hope you kept meticulous and detailed records and also specifically identified WALLETs which have the specific coins at any given point in time!
I actually did that, but then he moved the goal posts.
Quarterly estimated payments are different from the payment plans thing.
Dont be a dick. Its shitposters like you that make biz look bad.
Specific identification makes common sense. Lets say you do a day trade with some nominal amount of btc, say 0.01. You make the trade and then sell an see a small loss or gain. Then you repeat this 10x a day.
Under FIFO it assumes you are selling the earliest bought btc (and going for max gain on this) each time you traded that 0.01 btc. That is of course ridiculous. The trading pattern for day traders is using a small portion of the holding each day. Specific identification should in theory be possible.
Assume FIFO in full for the first 0.01. The return is 0.009, and the next trade is 0.01. 0.009 should carry the cost basis over and FIFO, if we wish, to account for the 0.001.
Alternatively, if the gain was 0.001, the cost basis should be carried forward from the last trade.
That is common sense and reflects the reality of how trades are handled and portfolios are dealt with. Specificity is obvious because of the time code on each trade and the same assets being traded on the same day.
FIFO was created to deal with physical inventories. For example:
>Dell Computer (NASDAQ:DELL) uses FIFO. General Electric (NYSE:GE) uses LIFO for its U.S. inventory and FIFO for international. Teen retailer Hot Topic (NASDAQ:HOTT) uses FIFO. Wal-Mart (NYSE:WMT) uses LIFO.
Another way: lets say you sent coins to one exchange, traded on that exchange, and then sent them back to another wallet. Massing all transactions across all exchanges results in absurdities like cost basis on one sell on one exchange affecting another.
it's almost like the blockchains keep track of all that shit for us. LMFAO. he's just pissed cause he already filed and paid FIFO
My real hope is some sort of class action against the language in the guidance alleviating what is in reality just turning hundreds of thousands of law abiding citizens into debtors and criminals, robbing local communities of capital, and hurting individuals who were not acting in bad faith.
Something reasonable, something that can be retroactively applied.
Maybe DJT can attach a rider to the DACA bill granting amnesty to crypto holders in exchange for giving away citizenship for free. Of course he signed the last tax bill over without reading it so maybe executive order.
What state are you from?
>tfw my accountant talked about crypto with the head of the swiss kantonal tax office and he said something along the lines "oh its all a bubble so they'll loose it anyway, we'll just see it as capital gains and not income."
Tfw: did 137 trades (mostly slowly cashing out)
Tfw: hoping i dont get labeled professional trader for 2017. Then taxes are only 0.35% on capital.