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Mon Feb 8, 2021, 02:34 PM

Bitcoin is taxable. Trouble is no one mentions that

"... make no mistake: you are required to report gains and losses on each transaction or when you earn cryptocurrency, even if the gain or loss is not material. The IRS holds you responsible for reporting all income and transactions whether you receive a tax form from a crypto exchange or not. ..."

"Buying and selling crypto is taxable because the IRS identifies crypto as property, not currency. As a result, tax rules that apply to property (but not real estate tax rules) transactions, like selling collectible coins or vintage cars that can appreciate in value, also apply to bitcoin, ethereum, and other cryptocurrencies.

"The IRS isn’t kidding around. Failure to report income, including income from the sale of crypto, could result in IRS levying penalties. Starting with 2019 tax returns, the IRS requires you to answer “yes” or “no” to a question about whether you had any crypto transactions during the year."

All transactions, meaning you buy a candy bar, you must keep track of that transaction. It's insane.

I worked for H&R Block last year (luckily had to leave in early March) and this was a giant PITA. Imagine the horror when people discover their Bitcoin isn't so awesome as they were lead to believe. For one it is not anonymous -- they can and will find you if you think you can lie to the IRS.

Crypto and Bitcoin Taxes

Edited to fix sentence I didn't finish

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Reply Bitcoin is taxable. Trouble is no one mentions that (Original post)
lettucebe Feb 2021 OP
BSdetect Feb 2021 #1
qazplm135 Feb 2021 #2
DetlefK Feb 2021 #3
Name removed Apr 30 #4

Response to lettucebe (Original post)

Mon Feb 8, 2021, 02:39 PM

1. I think some people mention the tax aspect. lol

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Response to lettucebe (Original post)

Mon Feb 8, 2021, 02:43 PM

2. that's why I keep it simple

I just put in about 300 bucks in various cryptos for fun. I don't plan on selling for like 10-15 years. I won't buy anything with it.

Worst case, I lose part of the 300. Best case, it blows up into something relatively substantial in 10 years or so. In reality, it's something fun and cool to follow with little risk.

And if it blows up to like 100K from where it is now, and I've made a little money, I'm cool with paying taxes on that.

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Response to lettucebe (Original post)

Mon Feb 8, 2021, 02:47 PM

3. That's the point: Bitcoin isn't currency. It's a bartered good.

Currency has been issued by some sort of organization. But Bitcoin is an object, a piece of code, that is not tied to the oversight of any organization or bank or state.

For example: If counterfeiters find a way to make counterfeit coins or bills or if the integrity of the currency is threatened in any way, then there is someone responsible for taking care of this and ensuring the value of the currency. But Bitcoin is static. Bitcoin is fixed. If something goes wrong with Bitcoin, there is no authority-figure who takes the responsibility for fixing it.

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