Bitcoin tax question

[hedgehog]

So, I was talking to a coworker who is a CPA and he told me that any gains made in bitcoin and then transferred to a sportsbook will be subject to income tax. Is this true? How can I figure out my cost basis? Does Coinbase keep up with it? Ive also got money in a wallet and at poloniex as well. I've been buying bitcoin for over a year now. I even took a shot in the dark at ethereum and litecoin in early June. Just want to make sure I don't get hit with some penalty by the IRS when it comes to income taxes in April.

Thanks in advance for any more info.

 

[BobbyBlueChip]

So, I was talking to a coworker who is a CPA and he told me that any gains made in bitcoin and then transferred to a sportsbook will be subject to income tax. Is this true? How can I figure out my cost basis? Does Coinbase keep up with it? Ive also got money in a wallet and at poloniex as well. I've been buying bitcoin for over a year now. I even took a shot in the dark at ethereum and litecoin in early June. Just want to make sure I don't get hit with some penalty by the IRS when it comes to income taxes in April.

Thanks in advance for any more info.

Why don?t you pay the cpa and have him tell you.

 

[BobbyBlueChip]

Actually, find a different cpa. Because he?s wrong.

 

[Trampled Underfoot]

Actually, find a different cpa. Because he?s wrong.

I think he should just stick with that one. :mj07:

 

[Woodson]

This is important and Ill do a detailed message as a non tax adviser very soon. You do need to file it. You are thinking correctly.

 

[saint]

I have done zero reading on this one but it makes sense that your basis will be established at the time of buy-in. Ie, I fund coinbase and buy 15k of bitcoin at xxx price, that's my basis. From there it's none of the IRS' business where it goes, until it ends up back in coinbase for me to cash out. No different than stocks really/

 

[Bombs]

I have done zero reading on this one but it makes sense that your basis will be established at the time of buy-in. Ie, I fund coinbase and buy 15k of bitcoin at xxx price, that's my basis. From there it's none of the IRS' business where it goes, until it ends up back in coinbase for me to cash out. No different than stocks really/

All crypto is considered property and crypto to crypto are not like-kind transactions.

When you sell one crypto for another you are closing your position and reestablishing in the new crypto.

www.bitcoin.tax can compute all of this for you. its extremely robust.

i believe it is not worth the risk to try to skirt taxes here.

 

[saint]

All crypto is considered property and crypto to crypto are not like-kind transactions.

When you sell one crypto for another you are closing your position and reestablishing in the new crypto.

www.bitcoin.tax can compute all of this for you. its extremely robust.

i believe it is not worth the risk to try to skirt taxes here.

Of course but if in the end it's converted back to BTC, I'm not sure what happens in between matters.

Ie I plunk 15k into coinbase and buy 1 BTC. I then go to blockchain, to poloniex, fuck around on the exchanges, buy alt coins with my BTC, but ultimately, turn the alt-coins back into bitcoin and get back to coinbase and sell for cash- I just don't see how an undermanned IRS is going to look at the cost basis of every alt coin and bitcoin transaction. Cash in establishes basis, cash out and pay tax on the gains or itemize the loss.

 

[Bombs]

Of course but if in the end it's converted back to BTC, I'm not sure what happens in between matters.

Ie I plunk 15k into coinbase and buy 1 BTC. I then go to blockchain, to poloniex, fuck around on the exchanges, buy alt coins with my BTC, but ultimately, turn the alt-coins back into bitcoin and get back to coinbase and sell for cash- I just don't see how an undermanned IRS is going to look at the cost basis of every alt coin and bitcoin transaction. Cash in establishes basis, cash out and pay tax on the gains or itemize the loss.

I hear you, but that's not by the books. If they ramp up their enforcement, they will figure out you have all sorts of alts. This is also all public on the blockchain.

I know its impossible for them to go after this at the current time point, but it may not be in a few years.

 

[Bombs]

Of course but if in the end it's converted back to BTC, I'm not sure what happens in between matters.

Ie I plunk 15k into coinbase and buy 1 BTC. I then go to blockchain, to poloniex, fuck around on the exchanges, buy alt coins with my BTC, but ultimately, turn the alt-coins back into bitcoin and get back to coinbase and sell for cash- I just don't see how an undermanned IRS is going to look at the cost basis of every alt coin and bitcoin transaction. Cash in establishes basis, cash out and pay tax on the gains or itemize the loss.

I really with there was better guidance. I have a substantial tax liability from this for 2017. And if they get rid of selective identification for 2018 as in the current tax bill then my ability to move alts easily will be restricted until a few slide into long term gains.

 

[Jaxx]

I hear you, but that's not by the books. If they ramp up their enforcement, they will figure out you have all sorts of alts. This is also all public on the blockchain.

I know its impossible for them to go after this at the current time point, but it may not be in a few years.

Bombs did you find someone locally proficient in Crypto currency taxes to calculate and report? I called a tax agency I have used in the past and they talked a good game but I am weary. Any thoughts on that?

 

[Bilkymesk]

I think you had your final decision for your issue and I wonder if you found a different cpa. You'd got your money in your wallet and so I think you should do that.

edit link : admin

 

[Bombs]

Bombs did you find someone locally proficient in Crypto currency taxes to calculate and report? I called a tax agency I have used in the past and they talked a good game but I am weary. Any thoughts on that?

yes -

i talked to several tax lawyers and accountants.

basically, you have to file as you would with any property investment.

long and short term gains as applicable.

all trades are realized gains at that point. i.e. you trade 1 btc for 1 eth that means you are selling btc to usd (pay gains) then you are establishing a new position in eth.

any mining or forks is income.

see www.bitcoin.tax - does it all for you