With the giant rise in price over the last year or two, there are bound to be some IRS cases that come down hard on individuals that have made a ton of money and not reported it. The IRS has its ways have hitting people, and they'll make a point to make an example out of a few individuals in highly public cases to scare people into compliance.
My assumption would be that the proper way to track a crpyto trade is using the USD equivalent. For example, you buy 1 BTC for $1000. A few months later, you then trade 0.5 BTC for 5 ETH. You're supposed to track the USD price of BTC at that point - let's says it's now $2500/BTC. Then your taxable gain would be $750 ($500 cost-basis for the 0.5 BTC sold for $1250). You would also have a new asset - 5 ETH with a cost basis of $1250, along with your remaining original asset of 0.5 BTC with a cost-basis of $500. It's basically the equivalent of selling BTC for USD and then buying ETH with that USD. As Yung-T said, almost no one likely does it, and it's virtually impossible to do retroactively since you don't know the USD-equivalent at the time of your BTC->ETH trade, but I believe that would be the correct IRS-approved method.
Yes, but the issue is some exchanges like Bittrex do not do fiat. At any given point in time, the value of a cryptocurrency can be pretty significantly different across the exchanges. Ive seen a $1000 difference with Bitcoin from one exchange to another. Its like having Google or Apple on every exchange in the world ... each one would have a different value at any given point in time all while being able to hold the share off the exchanges at the same time.
I think there was a report that so far only around 900 people have filed that they own bitcoin, it's a quite funny and also dangerous situation. As supermac posted on the top of this page, we will very likely see some high-profile cases where the IRS goes hard on some individuals to scare everyone into filing taxes.
Agree - the normal IRS policy for something goofy like would be that you still have to track it and justify your system (so they know it's not manipulation). For example, you could always use the equivalent prices on Coinbase or CoinMarketCap or whatever you choose as your baseline for all your calculations, and you'd probably be fine. What you couldn't do is randomly choose a price on a different exchange each time, because that could be used to manipulate your tax liabilities.
Btw I wouldn't really recommend that discord I posted anymore, it has recently been flooded by teenagers and wannabe-pros that try to rely on TA waay too much and often overreact to every blip they see. You can still look for good altcoin tips and news there, but please don't listen to most of these guys when it comes to btc price predictions.
Glad I bought some LTC at $82 yesterday. Little help: I want to speculate on some tiny crypto. How about Cardano (ADA) or any other tiny crypto with promising technology?
That place has dropped hard. They all tried to short btc recently and miserably failed. Avoid. Haven't even seen them talk about any alts at all either. Going to try to look for other places, and will take recommendations from people if they have any good sources.
Considering ADA is #9 in market-cap, it's not really "tiny" anymore. I haven't looked into it yet because my money's elsewhere currently.
Today and this weekend are going to be very interesting for Bitcoin. I shall pay attention. I would think it dives a bit this afternoon.
They told me to short btc basically since 5k and always told me I'm doing bs buying at the top, I'm falling into fomo blabla. Ton of teens now there that just got into TA and think they can predict the whole market, even when the biggest pros tell you everything is uncertain atm. And then you see all those comments crying how they lost hard on trading, it's hilarious.
Just went into the discord for the last time and saw how the biggest TA advocat who shat on me yesterday just lost 80% of his money because of a wrong short, hilarious. Kid and some others were 100% sure btc would drop to 7.9k (don't ask me how they arrived at this number, guess their TA is almighty).
The key for all of us is to predict what couple coins Coinbase will add ~January. If you get in now before they add it, you will probably make 10x return within a year. Ripple, Monero, Dash....one of these could very well be added and I have none at this time.
I saw it at $77 and change, but was not fast enough. Lol Btw, is there a general investment ideas thread? Don't want to miss the next Bitcoin.
