Proper taxation of cryptocurrency gains and losses.
This sub is for discussing proper taxation of cryptocurrencies, and legal tax minimization. It is focused on the US, but discussion about crypto taxation in other countries is welcome as well.
Note: The users of this subreddit do not provide tax, legal or accounting advice. This material on this subreddit is here for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. The opinions posted on this subreddit are wholly owned by the users who post them.
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Honestly I only got Coinbase because I got lucky opening a csgo case and wanted to sell a skin I got. How do I tax this and will I have to pay more in taxes because I sold this knife
I have been staking my crypto for 2 years but the only profits have been about £100-200 from the staking side which is now added to my capital gains. Now I want to sell my crypto in the U.K. now, the total amounts comes to £1k to £2k. Would I need to pay tax at all regarding this one - as the profits from staking are under 1k miscellaneous allowance and the U.K. allowance is 6k for CGT - would I need to report this.
never done one, but just planning ahead
Just wondering. When you fill in your self assessment, do you have to supply supporting documents/information?
Or is the self assessment all is required
Firstly, I want to know the above, whether in the U.K. do I have to pay any income tax on staking rewards or do i pay income tax when I have finally sold all my tokens. Additionally, here in the U.K. we have Capital gains tax. If my earnings are under 6k still with the inclusion of the staking rewards - do I even need to pay capital gains tax when selling?
So I’ve downloaded my history from kraken for this year
Which shows my deposits and my trades and withdrawals.
keeping all this safe incase ever need it for the tax man
one query - on my withdrawals to my cold storage there is no address details. Would this ever be needed. If so how do I get it
Live in the UK
Okay so im not sure because i have never done OTC with kraken before but hypothetically if i lets say want to switch over 5 Million worth of BTC for USDT and then withdraw it back to my cold wallet, do they report that one OTC transaction (I dont use CEX for anything and this would be my only transaction with them). This situation lets say I dont want to slowly keep selling off on an exchange or dealing with slippage on uniswap or another dex.
So yeah since there was no gain since im only swapping it for a stable coin through OTC, would that get reported to the IRS? Thanks for your time
I used CoinLedger last year and it worked pretty well. This year? Complete garbage. Well over 100 transactions it hasn't picked up and is calculating things completely wrong. Not pulling historical data for the price of eth and even USDC, pulling up transactions that aren't even me saying I'm associated with 15k in a shitcoin that I never would put that much money in.
Does anyone have any other recommendations for services or an actual person to help getting crypto tax for this year completed that's better than this train wreck?
Hi all. I’m a US citizen on the executive team of a European based startup with a token. I’ve been with the team over 2 years, we have sound tokenomics and are poised for significant growth in a RWA (real world assets) play.
As per of my employment contract I am owed a healthy portion of tokens which will unlock/vest over time as I continue with the company.
My dilemma: It appears based on US tax law that taking ownership of the tokens will likely trigger taxation based on the tokens’ fair market value. The tokens are not liquid (no ICO yet, but likely to happen in the next cycle) but still I’m advised that since we’ve privately sold them to investors at $x/token that my net liability will be based on (# of tokens) x (highest private sale transaction price) x (my tax rate roughly 28%).
This would create a likely tax liability I can’t afford for an illiquid asset of speculative value at this time. All of my US colleagues are facing the same dilemma.
The basic question is, what do I do? I would like to take digital ownership of the assets for piece of mind rather than an IOU contract from my company:
-don’t startup employees receiving equity have the same problems here in the US? -am I missing something obvious? Am I being overly cautious?
It just makes me wonder, given the McNulty v IRS Commissioner [157 T.C No. 10 (Nov. 18, 2021)] decision, if those who hold their keys would be penalized the same. On the one hand, an SDIRA has an IRS regulated custodian and there is no physical asset being held at one's residence like the gold example because it is literally on chain. However, I don't trust that the government would not use an opportunity to penalize anyone to get money where regulations are unclear.
Any CPAs/EAs care to chime in about this?
I've been offered a contract to provide services for a blockchain company. Part of the payment is in the form of tokens (via an airdrop), that come with a two year lockup period (which I believe is enforced via smart contract). As I understand it, because these tokens are in exchange for a service, they are taxed as income. I'm UK-based, but from what I can tell the rules are the same in the US in this regard.
What I'm not clear on is whether this income is reported for tax purposes based on when the tokens are sent to my wallet, or when the lockup period ends. If the first option, then you could be in a situation where you are taxed on the tokens when they are received, but then they go to zero why locked up, and you end up losing out. This makes me think the second option is correct, but I can't see this stated anywhere when searching online.
Can anyone clarify this? Thanks!
Hi Prospective Angel,
I came to the US in 2015, got my H1b in October 2019, and Green card in October 2021 (am still a foreign national). I have been investing in crypto since late 2017. Initially, I was mostly trading on Coinbase. Soon enough I learnt about Binance and other foreign exchanges and eventually dexs. I was a student so did not have much money to spend. Lost a small amount in crypto and over the years had nothing to show for it so I did not even bother about taxes especially when I was not a US person. Over the years, however, I filed my taxes related to crypto for assets that were on Coinbase and Robinhood here in the US but they were mostly losses. Now that I have learned the crypto world better, my investment is worth a decent amount. The problem however is that I don't have the buy, sell prices for the many tokens I have since 2017 on foreign exchanges and dexs. Some of them I swapped for other tokens and some went to zero. Some of my accounts got deleted, and some exchanges went out of business so I don't have an actual cost basis for my cryptocurrency. An important thing to mention here is that I have the USDC trail for the amount I sent from Coinbase and Robinhood to these exchanges and wallets to buy different tokens. I also know the worth of my assets currently so I know how much profit I have made on paper since I started. I just don't have the complete story in between. Also, I made foreign accounts on exchanges based on my foreign citizenship documents. I now want to clean everything up so that I pay what I have to and start afresh. I just don't know where to start, please help!!!
How does this software figure out gains and losses? Also Can it determine if the gains are more than a year? Thanks
I might be overthinking this, but…
If I sell $10,000+ worth of cryptocurrency on a centralized exchange am I technically required to file IRS form 8300? Would I be considered the recipient of the funds, or Coinbase since it’s deposited onto their platform after the sale?
Also, when it’s transferred to the bank, the bank files it on your behalf, not you correct?
I have bought fractions of a Bitcoin overtime (ex. .0002385), and they’ve been pooled together in one wallet. But let’s say I send .124 from that wallet, how would I calculate the cost basis of that transaction if I never had a original purchase of exactly .124? With stocks cost basis is easy to understand but I’m really confused about partial pieces of coins going around.
Hello, I have recently won significant money in crypto gambling. Im new to crypto in general so this is all new to me. At the time of the win and cashout, I was in Canada, but I currently live in the United States and am a United States citizen. How will the taxes work? Do I need to declare it as income? Do I need to pay capital gains tax? Im very confused. I know in Canada, gambling winnings are not taxed, but in the US, they are. Anyway sorry if these are easily answerable I could not find much on Google. Any help is much appreciated!
If I put 5k in btc and it became 10k and I pull only my initial 5k out, do I pay any taxes on that original investment? Usa resident
What would be the cost basis associated with crypto acquired through Coinbase earn?
Would that be the same way as staking? As in the value at the time of receipt? Or would it be $0?
I’ve held Ethereum for over a year, qualifying for long-term capital gains tax.
If I bought more Ethereum, does that “reset the age” of this investment?
Or would I still have the original investment amount considered as long-term and the additional investment amount as short-term?
Thank you in advance.
I am US citizen, but I hold all of my crypto on NEXO, which is a foreign exchange and is also soon leaving the US entirely.
I’m wondering if when I file my taxes next year the IRS will be able to see the value of my crypto holdings as well as possibly even seize my crypto from my exchange.
Is that possible for them to do? Is there any way for me to prevent that from happening?
I fully intend to report my holdings, but I just don’t want the IRS to take my crypto during a crucial time like this and I could potentially lose out on massive future moves.
The NEXO support team so that no one can ever take my holdings, but I’m not sure how that applies to the US government.
Also should I just start using Bitcoin ATMs in order to stay fully anonymous? Not sure of the benefits and risks there.
Any help or advice would be greatly appreciated, because I am not interested in the IRS taking over $50k of my Bitcoin.
Losing confidence in Zenledger. I am looking for an alternative. I am a low-frequency user <20 transactions a year.
Like the title says, I would be looking for software that could tell me, using all my transactions like coinledger.io - - if I sold lets say .5 BTC, what would I owe in tax based on my current cost basis.
how do i work out tax implications when used so many different exchanges over the years, even ones i dont have acces too anymore
Hello. I recently moved my btc that i been holding fir about 2 years from my ledger to robinhood exchange and instantly sold them. There is any way to avoid the short term taxes?
TL;DR I've been trading since 2017 and primarily use Coinbase ( with some side usage of Crypto.com and Crypto.com DeFi wallet. In past years, I moved my coins a lot between these exchanges/wallets and also converted to different coins in the process. I massively regret using DeFi Wallet due to the fact that you have to try and remember all the tokens you used as the only way to extract transactions.
Anyway, I'm working on my first UK tax return for the 22/23 year (I lived in a different country in previous years) so I'm trying to audit all my transactions going back to 2017. I've tried many sites, but the one that seems the best is CryptoTax Calculator. But after integrating everything I can think of, the my cost basis is £10K higher than it actually is and my profits are way off too. I looked into hiring an technical accountant to help me reconcile these trades but they wanted $4K for the job which seems way too high (I have about 10K trades but probably 90% are staking transactions) and I've only ever spent $30K total -- I'm not a high roller!)
Does anyone have a recommended service to help me reconcile? Any advice on auditing Crypto.com DeFi? Any good CryptoTax tips/tutorials in general? Thank you!
Just to help me do my tax strategy, I want to people able to input some dates, like a file I can import and it outputs the price of the coin on those dates.
Anyone know anything like this? Pretty sure accountants use something similar to this.
Hi all. I have been in crypto for a good few years but did lots of trading and buying and selling coins on a few of the bigger sites.
I have some bitcoin offline on a hardware wallet but i cant even remember where i bought it or where it came from. i have dipped in an out if it over the years. most of the shit coins i bought tanked and i pretty much just gave up on them.
I never took any money back into fiat in my bank account, but also never did any tax return or paid any taxes. After or during this run i may consider taking out around £20k by selling some bitcoin.
My question is how would i pay taxes on this with such a long and complex crypto history, will i be required to try and work out all my previous trades and taxable events through the years?
Can you just assume a baseline and attempt to pay the max tax possible for amount being withdrawn now, Im assuming previous years of not paying tax will come back to bite me?
Ideally i would like to buy more bitcoin and dca for a while, but these tax worries about getting it back into fiat eventually are holding me back.
Hello everybody, I am an Italian resident who ownes an account on cripto.com, so exhange base in SG. Of course I do pay taxes in my country of residence but wondering if I have also to declare and pay taxes in SG on the crypto activities (staking, earning, card cashback) due to the fact the exchange is based in SG. I cannot find anywhere the matter.
Many thanks for your help!
I previously took out funds in the 2021 bull run and I paid a large amount of tax on that. I want to know what are the best ways to decrease my tax this time around. I live in the uk. I have thought about setting up a ltd but as the funds were processed through my own personal account I’m not sure how that would work . The investment is a long term investment and I haven’t been trading so I’m assuming I’d still pay around the 10-20% mark. I’m just wanting a better idea on what I can do to reduce that amount.
is the very last day to sell crypto, for profits this year. to benefit from this years 6k CGT allowance.
Is it 31st march 2024