Not sure what you are exactly talking about here as that doesn’t seem accurate considering the IRS 2014 advisement. I am not a CPA but @Peter_Rehm is responding so I will cut mine short.
Break’n it down:
-1.) Say I bought bitcoin for my brother then transfer it to poloinex and then bought ripple ----The coin was in your name on Poloniex so my presumption is you should pay the tax on any gain here. That’s also the way the taxing authority would want to see it (agreeing with Rebecca_CPA above). You might get your brother to reimburse you for the taxes;
-2.) … then took all the ripple and sent it to his poloinex account: Possibly not taxable depending on the amount of ripple that you sent to him. There is a $14,000 exclusion amount that is non-taxable. Are you over that amount in value on the date of the gift (it is a gift)?
Actually “qualified traders” have special tax rules. Read through the attachment if you’d like.
PLR - Removed cited article - misleading to the conversation
BTW, Qualifying for this special treatment is very very difficult.
All kinds of day traders (commodities, bonds, forex, etc) are taxed under rules of essentially two sections defined by the IRS - section 988 and section 1256. I suggest that you do a little “light reading” on the subject if you are interested in becoming a professional day trader.
In case anyone was wondering which is better. I’ve tried both cointracking and Bitcoin.tax. I found the latter to be very cumbersome and the reports it produced did not seem quite accurate. My recommendation is cointracking.info
Confused About BTC Wallet Addresses To Add To Cointracker.io…
So, I’m using cointracker.io, and have imported exchanges, and attempted to import some wallets as well.
All of my btc holdings, fail to have registered in the site’s, “Your Portfolio” page, though I have added my BTC Wallet’s Receive Address. So, that base receive address, has no BTC held.
I am trying to figure out which address from my wallet’s history to add to correctly report my holdings. In the history though each transaction lists, sometimes many, “Inputs and Outputs” with corresponding addresses.
I am unsure how I should go about choosing the correct address to report to the cointracker.io import, to “capture” the current wallet address; surely not all these myriad addresses in the wallet’s history?
At any rate, I hope this makes sense, and if anyone could provide any insight, I would greatly appreciate it.
Yikes that sounds complicated. Did you try cointracking.info- they don’t ask for addresses but you have to do manual entries for the deposits and withdraws.
Figured it out, I was over complicating it, turns out. I was looking in my “Transaction History” which is, just full of addresses, inputs, outputs…
I went to the “Coins” tab of my wallet though (Electrum BTC) and it had the address where my BTC were actually “located” within the wallet, which I am so glad I figured out, would have been “hunting and pecking” forever in “Transactions”.
Also, learned something new about my wallets!
I would love to get in contact with a tax expert as I have tons of questions, if anyone can messagwe me? Thanks
Let me know what questions you have. I’m the resident tax pro on this forum.
Well, the point is, I don’t want to spend a lot on a tax professional, yet in doubts. How does it work if you’re doing so as a member of a bitcoin exchange? A friend of mine, who’s using Bitfinex, suggested me to file a W-9 as an independent contractor, with the form on the IRS website or here: w9.pdffiller.com He said he’s doing so and got no problems with the IRS, but it doesn’t seem like legal to me
Independent contractor is for people who WORK independently and receive compensation. That doesn’t apply here so he is wrong.
If he isn’t reporting correctly it may catch up to him.
There are a bunch of low cost to free tax programs.
You do NOT have to use the highly advertised tax packages.
Just make sure that the package has an approved interface to the IRS and state taxation systems.
Just do a google search on them. Look for “approved irs e-file providers”