“Did I Ruin My Life by Trading Crypto?” After Receiving $400,000 Tax Bill


#1

IF legit this is a big OUCH/WTF moment :fearful:


#2

Was reading that a few days ago. One of the main reasons I don’t trade often at all.


#3

His best option is probably to declare his 2017 earnings, try to work out a payment plan with the IRS, and then sell everything in 2018 and take a loss that he can carry back against his prior year earnings.

The IRS will be on him like a wet blanket in 2018 to pay the bill but a good accountant can get the heat off of him pretty quickly. It just won’t be pretty.


#4

I am curious how he grew his portfolio from $5K to $800K in coinbase in less than a year.
That’s 16,000% return. He must be a investing/trading genius.


#5

Dollar cost averaging bitcoin obviously.

:troll:


#6

Assume he bought BTC in January 2017 when price is around $963.
He could have 5.19 BTC if he purchased $5K.

2017-01-01 BTC $963
$5000 / $963/btc = 5.19 BTC

At the ATH, 5.19 BTC * 20,000 = $103,842

It is reasonable that his portfolio reached $100K, but to reach $800K, how?


#7

That’s a huge distance from $100K to $800K.


#8

Alts, ICOs, and most of all… Luck.


#9

The 2017 Form 1099-K was from Coinbase.
In 2017, Coinbase only had BTC, ETH, LTC and later added BCH. There was no other Atls.
Unless he moved his fund out to other exchanges and bought Atls and ICOs and then later moved the fund back to Coinbase?


#10

Yes, if you read the original reddit post, he said he got into alts.


#11

Yeah his issue was trading on coinbase and not on DEX.


#12

image https://i2.wp.com/csnews.io/wp-content/uploads/2018/01/hqdefault.jpg?resize=215%2C161


#13

Is that him? this is Crypto Nick, BitConnect promoter.


#14

Yeah,if it’s Crypto Nick then I’m glad


#15

I watched some of his videos before, his portfolio was way more than 1 million.
He easily spent 500K on Hashflare.


#16

i dont get it though, does he really have to pay 400k even though he only profit 100k?


#17

Yes, whatever his profit was at the end of 2017, the government wants a cut of that. Even if he didn’t cash out to fiat.


#18

Just to make sure I’m understanding this clearly, was he bringing his gains from external exchanges into Coinbase, then failing to file taxes on them? So essentially keeping the funds on Coinbase and not reporting at all?


#19

@ravindram He didnt even make money!

How do all the day traders pay for this? What if my $20,000 became a million? Nuances are crazy but this next bull run will happen. What if you put 20k right now in November in something and it 10-20x and you want to sell and not miss it. making me scared of selling for some reason haha


#20

How is it profit if he didn’t cash out ? The money is still invested. Thats like saying "Since this is the last day of the year before 2019 and your portfolio is up 10x, you owe tax on that just because the year ended. So you’re basically FORCED to sell because the its the end of the year. Basically you have 1 year to accumulate gains and even if you don’t take those gains, it cannot carry over to the next year and if you lose all your PROFIT on Jan 3 of 2019 (because you didn’t sell @ 10x) you still have to pay tax on the 10x gain that you no longer have. @ravindram please explain ?