US IRS tax reporting for cryptocurrencies


#344

Sorry, I am in the US.


#345

Ravindram,
Since you are a taxpayer in the USA you’ll only pay taxes on what gains you have recognized (ie you sold the investments you had held for a while). If you have losses on other investments you can offset your gains with those losses presuming that you also sell them.


#346

Understood. Selling includes trades I’m assuming. Thanks for the clear answer. You’ve been a big help in this thread.


#347

Thank you for the compliment! It does mean a lot.


#348

So i wanted to clear something else up and what what events are taxable in a specific situation.

USD---->BTC---->ALTCoin

In this scenario, I THINK the taxable event is on the BTC---->ALTCoin, correct?

So say I bought BTC for $1000 and then traded it for ALTCoin. How is that capital gain tax calculated? If the ALTCoin value went 10x after the trade, does that affect the capital gains, or is the tax on the gain/loss based on what the value of BTC and the ALTCoin was when initiated the trade?


#349

For US citizens the gain is whatever you made on BTC not on the alt, assuming you are still holding the alt.

If BTC is bought and traded immediately for an alt it’s possible you have no gain / loss.

Normal disclosure: get confirmation from your CPA.


#350

I mean i n all honesty my total portfolio is down by 75% as we speak. Can i report losses?


#351

I believe for the US it’s capped at around $3K and any additional losses are rolled forward for future years.


#352

If you are in the US you can only claim the losses if you sold and the value was lower than when you bought it this is a very basic example. Just because your holdings USD value goes up and down doesn’t mean it is a loss. It is not a loss or gain until you convert that holding to another asset such as another crypto or FIAT.

I am not a CPA. This is my understanding from the information provided to me by my CPA and @Peter_Rehm here.


#353

What is the percentage taxed on crypto to crypto trades since that’s a taxable transaction? Is that tax on trades big enough to effect how much you would be making on some sort of short term gain making it better to just do something like DCA and hold something for at least one year to pay less on it?


#354

I think the same rules apply. short term and long term capital gains tax.


#355

Im more nervous about taxes than i am losing money attempting to trade


#356

Yeah, its the main reason i dont trade much. Keeping track is a pain in the ass, so i rather just have the ability to buy with FIAT and hold.