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Are Ethereum Gains Taxable

Paying Tax In Crypto Ironically Triggers More Taxes - Expert Take

Paying Tax In Crypto Ironically Triggers More Taxes - Expert Take

Paying Tax in Crypto Ironically Triggers More Taxes - Expert Take Every time you transfer crypto into fiat, you might trigger gain or loss. In our Expert Takes, opinion leaders from inside and outside the crypto industry express their views, share their experience and give professional advice. Expert Takes cover everything from Blockchain technology and ICO funding to taxation, regulation and cryptocurrency adoption by different sectors of the economy. If you would like to contribute an Expert Take, please email your ideas and CV to [email protected] . In the US, the Internal Revenue Service (IRS) is not accepting Bitcoin, Ripple or Ethereum for taxes yet. But it might not be too far off, with Arizona moving to become the first state in the country to accept payments in crypto and other states likely to follow. If passed, Arizonas Senate Bill 1091 would allow income taxes to be paid in Bitcoin and other cryptocurrencies that are approved by the Arizona Department of Revenue. The changes would not come into effect until 2020, which seems like light years away. Tax authorities would be required to convert such payments to dollars at the prevailing rate. That makes sense since tax obligations are in dollars. Taxpayers would get credited with the converted dollar amount. Any swing in price that resulted in the state not getting the full payment would be the responsibility of the taxpayer - so the timing is relatively important. However, what so far few seem to be noting is the taxable nature of paying in cryptocurrencies. After all, rightly or wrongly, the IRS position is that cryptocurrency is property , not currency. This fact has some big tax implications. For example, say you owe $5,000 in taxes. You could pay the $5,000 in dollars. Or soon, you could pay wit Continue reading >>

Tax-free Bitcoin-to-ether Trading In U.s. To End Under Gop Plan

Tax-free Bitcoin-to-ether Trading In U.s. To End Under Gop Plan

Tax-Free Bitcoin-to-Ether Trading in U.S. to End Under GOP Plan Change makes trading one digital currency for another taxable Bill limits deferral break to real property trades only Investors in bitcoin and other virtual currencies would lose a lucrative tax break under the Republican tax bill thats on its way to President Donald Trumps desk. New limits in the bill would bar cryptocurrency owners from deferring capital gains taxes when trading one type of virtual currency for another -- effectively closing a gray area in the tax code, experts say. Those gains can be considerable. Bitcoin, which had an initial price of less than 1 cent when it first traded in 2010, was around $1,000 as 2017 began and surpassed $19,000 this week, at least briefly, before paring some of the gains. Many enthusiasts jump between bitcoin and a long list of similarly volatile competitors, such as ether. For investors who hold the virtual currencies, the bill is bad news, said Kelsey Lemaster, a tax attorney with Goodwin Procter LLP. Every time you trade one digital currency for another, one token for another, its going to be a taxable event. The change might not deter traders, who have been leaping into cryptocurrencies without researching what they are -- let alone their tax implications, said Brian Kristiansen, a partner in the digital currency services practice at Friedman LLP. Bitcoin Whales Are Cutting Back as Eager Minnows Dive In: Gadfly Under current law, such trades have been protected under a provision that allows investors to defer capital gains taxes on so-called like-kind exchanges -- trades that traditionally have been staples for investors in real estate, art, racehorses and aircraft. The deferral applies when owners of such property swap it for other property of a similar kind Continue reading >>

Blog | Paying Taxes On Cryptocurrency | Bitcoin, Ethereum, Ripple, Etc.

Blog | Paying Taxes On Cryptocurrency | Bitcoin, Ethereum, Ripple, Etc.

With the explosion in popularity of cryptocurrency (i.e. Bitcoin, Ethereum, Litecoin, Ripple, etc.) in 2017, you are sure to have clients who have invested in it and (likely) profited off it as well. But as tax season approaches, do you know how to file taxes on behalf of those clients and their cryptocurrency (also known as virtual currency) investments? Essentially, theyre taxed as property if theyre held as a capital asset. But youll need more info from your client: The dates provided will help you determine whether the sale qualifies as a long-term gain or short-term gain. Short-term gains are to be taxed equal to their federal income tax bracket percentage. Long-term gains from cryptocurrencies follow a different tax bracket: Individuals in the 10% and 15% income tax bracket pay 0% on cryptocurrencies Individuals in the 25%, 28%, 33% and 35% income tax bracket pay 15% on cryptocurrencies Individuals in the 39.6% income tax bracket pay 20% on cryptocurrencies Your clients gains on the sale of cryptocurrency is also subject to the 3.8% tax on net investment income if their adjusted gross income is above $200,000 ($250,000 for married filing jointly). In a nutshell, although cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) are viewed as being globally anonymous, not reporting gains or losses could be viewed as tax evasion by the IRS . Continue reading >>

Cryptocurrency Traders Owe Massive Taxes On Fat 2017 Gains

Cryptocurrency Traders Owe Massive Taxes On Fat 2017 Gains

Cryptocurrency Traders Owe Massive Taxes On Fat 2017 Gains I consulted dozens of cryptocurrency (coin) traders on taxes in December and confirmed that coin traders made fortunes in 2017. Now that the 2017 tax-filing season is underway, these traders should gather online tax reports if available, use a coin trade accounting program, and review the latest guidance on tax treatment. On July 6, 2017, the IRS narrowed its summons against Coinbase, the most substantial U.S.-based coin exchange, to retrieve larger customers trades and other transactions to find unreported income. In late-December 2017, Coinbase added tax reporting of capital gains and losses using first in first out (FIFO). This move should undoubtedly please the IRS since there is no 1099-B issuance on coin trades. If you invested in cryptocurrencies and sold, exchanged, or spent it in 2017, you have to report a capital gain or loss on each transaction, including coin-to-currency sales, coin-to-coin trades, and purchases of goods or services using a coin. Deduct coin fees and other expenses appropriately. Some coin deals naturally generate taxable income, including coin-to-currency trades and mining income. For example, Bitcoin sold for U.S. dollars is a noticeable capital gain or loss reportable on Form 8949. Or, when a coin miner receives a coin for his work, he or she naturally recognizes business revenue based on the value of the coin. The big problem for the IRS is that most other coin transactions are not evident for tax reporting, including coin-to-coin trades, hard forks (chain splits), and using a coin to purchase goods and services. The coin investor should impute a sales or exchange transaction to report a capital gain or loss on coin-to-coin trades and using a coin to purchase items. Many coin in Continue reading >>

Are Earnings From Cryptocurrency Mining Subject To Taxes?

Are Earnings From Cryptocurrency Mining Subject To Taxes?

Are Earnings from Cryptocurrency Mining Subject to Taxes? Are Earnings from Cryptocurrency Mining Subject to Taxes? Prior to late 2017, very few concrete cryptocurrency mining taxes existed in the United States or the rest of the world. As the values of top cryptos like BTC, ETH, and several others began to rise in late 2017, more cryptocurrency miners became more concerned with the possibility of taxation on crypto assets and for good reason. Government agencies around the world are starting to place more taxes on cryptocurrency mining. If you mine cryptocurrency, heres what you should know about recent tax regulations. First, well look at the newly-introduced US laws. Then, well look at some cryptocurrency mining taxes from throughout the rest of the world. Even though it might have been possible to legally not pay taxes on crypto mining in the past, anyone making profits off of cryptocurrency mining in 2018 (Tax Year 2019) and beyond will now be subject to taxation. Regardless if you are mining as a small side-hustle/hobby or a full-time business, there are new rules which the US Congress passed in December 2017 that change the way the IRS treats cryptocurrency. Before the US Congress put forth a clearer ruling in 2017, the classification category of cryptocurrency assets was up for interpretation according to many tax experts. Thats because many cryptocurrency miners and traders treated cryptocurrency similar to real-estate for tax purposes by citing IRC Section 1031 (a.k.a. the like-kind rule ). Essentially, this ruling meaning that a miner could theoretically trade a mined cryptocurrency for another cryptocurrency without having to pay taxes. Now, however, there are no more tax exemptions. US citizens and anyone with bitcoin mining operations in 2018 will have to Continue reading >>

Cryptocurrency And Taxes: What You Need To Know

Cryptocurrency And Taxes: What You Need To Know

Cryptocurrency and taxes: What you need to know It looks like 2018 will be a landmark year when it comes to the IRS and taxing cryptocurrency gains. The IRS treats cryptocurrency as property, so there are capital gain implications. The best way to minimize is to buy and hold for more than a year. Vincenzo Villamena, founder and CEO of Online Taxman Bitcoin had its coming-out party in 2017. With all the excitement and opportunities around cryptcurrency, it might be easy to forget about crypto taxation. Almost every bitcoin or other "altcoin" transaction mining, spending, trading, exchanging, air drops, etc. will likely be a taxable event for U.S. tax purposes. Without a doubt, 2018 will be a landmark year for Internal Revenue Service enforcement of cryptocurrency gains. Taxpayers should stay ahead of the game rather than be reactionary. The IRS is always more lenient with taxpayers who come forward on their own accord rather than those that get discovered. Coming forward now actually could be the difference between criminal penalties and simply paying interest. With only several hundred people reporting their crypto gains each year since bitcoin's launch, the IRS suspects that many crypto users have been evading taxes by not reporting crypto transactions on their tax returns. Don't put all your financial eggs in one investment basket Unfortunately, the IRS has provided very little guidance with regard to bitcoin taxation. One thing, however, is clear: Although both the public and the crypto community refer to bitcoin and altcoins as virtual currencies, the IRS treats them as property for tax purposes. Therefore, selling, spending and even exchanging crypto for other tokens all likely have capital gain implications. Likewise, receiving it as compensation or by other mean Continue reading >>

Tax Cut Bill To Require Taxation Of Cryptocurrency Trades In Us

Tax Cut Bill To Require Taxation Of Cryptocurrency Trades In Us

Tax Cut Bill To Require Taxation Of Cryptocurrency Trades In US A bill which President Trump is expected to sign will subject cryptocurrency trading in the United States to capital gains tax. The Tax Cuts and Jobs Act, which is heading to the desk of President Donald Trump after being approved by the Senate and House of Representatives, defines the act of exchanging one cryptocurrency for another as a "taxable event," says tax attorney Kelsey Lemaster of Goodwin Procter LLP. He and other lawyers have related that, if the bill is signed into law, it will prevent parties that trade digital assets from deferring the capital gains taxes (CGTs) that they would owe on those virtual currencies if their value increased while in the traders' possession. Under the legal standard currently in effect, these types of trades have been treated as "like-kind exchanges." This allows the payment of CGTs to be deferred because the properties being swapped are of a similar nature, so long as the exchange is completed within the space of 180 days . If and when this exception ceases to apply to virtual currencies, their trade "would be subject to tax at the time of the exchange ," says Steptoe & Johnson LLP tax attorney Lisa Zarlenga. At the moment, the precise nature of this likeness is not clearly delineated, but in any case, the bill would limit this exemption from CGT so that it would apply exclusively to domestic real estate trading. Guidelines issued by the Internal Revenue Service in 2014 state that a "taxpayer generally realizes capital gain or loss on the sale or exchange of virtual currency that is a capital asset," a designation which generally applies to those cryptocurrencies that act in a manner similar to "stocks, bonds, and other investment property." In other words, many cr Continue reading >>

Crypto Gains & Taxes!!!! - Ethereum

Crypto Gains & Taxes!!!! - Ethereum

Hey everyone, just felt I'd lend a little industry knowledge on some of y'alls new found wealth. I'm a successful US based tax accountant with years of experience in both taxes/consulting & cryptos. I wanted to drop a few lines of quick knowledge, just to reality check everyone a bit. PLEASE understand that it is a common misconception that cryptos(Be it, BTC, ETH, LTC, Zcash, etc...) are not taxable. This is simply NOT true. There ARE tax implications with what you are doing. Whether you are active trading, speculating, HODL'ing, etc. So while it's all fun and games to see your crypfolio jump by thousands of dollars a week(I know.. shit's cool. I get it. I'm watching mine climb by unprecedented percentages too), PLEASE PLEASE PLEASE do not be foolish enough to think these gains won't/can't get you into deep trouble if unreported. Not paying your taxes CAN and WILL get your ass thrown in jail, cryptos or not. Not only does the IRS want to know exactly what your capital gains are, but they are also VERY keen on knowing what your crypto balances are at the time of all purchases. This is to calculate your basis in the coins. This not only goes for BTC, but ANY and ALL cryptos that are readily converted to USD OR if they can be readily used for goods/services. Now normally, all this "basis" and "capital gains" talk is reserved for high net worth individuals, as most of these tax matters don't effect the every day earner. However, I PERSONALLY know several friends(Some from this sub), that have found themselves sitting on a shockingly high value of cryptos(USD). Some from the SUPER volatile BTC days, coupled with killer timing, as well as several lads that made great gains on our recent rocketship, lambos on the moon, shitfest. Keep in mind, this not only works for ALL gain Continue reading >>

Coinbase | Taxes Faq

Coinbase | Taxes Faq

How do I report digital currency activity on my taxes? Although Coinbase cannot provide legal or tax advice, the IRS has released guidelines for how to report taxes relating to digital currency activity. You can read them on the official IRS.gov website here: Will Coinbase sent me a 1099 or similar form? With the exception of some business accounts , Coinbase does not provide 1099 forms. Coinbase does however provide a specialized Cost Basis for Taxes report which will help with filing your taxes. This reportprovides a summary of your digital currency purchases and sales, showing your cost basis and capital gain/loss. We use a FIFO (first in first out) method for this report. Transactions sending into or out of your Coinbase wallet are treated as buys or sells at the current market price in this report. However, you should keep your own records for best results and update the report accordingly. For example, if you transfer funds offsite to a desktop wallet, and then back again, you would not count this as a sale of digital currency. You can generate the reporthere , by clicking on "New Report" in the upper right hand corner. This report is still in beta and should be used with caution. Note that if you have any deleted digital currency wallets within your Coinbase account, they will not appear in the report generation tool. To restore them, navigate to your accounts page , select "Show Deleted" at the bottom, and then un-delete the wallet you'd like to run a report on. Disclaimer: This report does not constitute legal or tax advice. Tax laws and regulations change frequently, and their application can vary widely based on the specific facts and circumstances involved. You are responsible forconsulting with your own professional tax advisors concerning specific tax cir Continue reading >>

Bitcoin And Ethereum Cryptocurrency Tax: Five Ways To Reduce Your Cryptocurrency Taxes Quartz

Bitcoin And Ethereum Cryptocurrency Tax: Five Ways To Reduce Your Cryptocurrency Taxes Quartz

Chris Haroun Founder/partner, Haroun Education Ventures How to keep more money in your wallet. (Reuters/Dado Ruvic) Chris Haroun Founder/partner, Haroun Education Ventures Last month the IRS issued a serious warning through a press release to anyone that does not pay taxes on their cryptocurrency profits. The statement says that taxpayers could be subject to criminal prosecutionAnyone convicted of tax evasion is subject to a prison term of up to five years and a fine of up to $250,000. Unfortunately, few people understand how to account for cryptocurrency gains on their tax returns. Why do I need to pay taxes on my crypto profits? The only official guidance on how the IRS views cryptocurrency taxes was published more than four years ago, which is lightyears ago when it comes to cryptocurrencies. At that time, the IRS stated that For federal tax purposes, virtual currency is treated as property [and not as a currency]. This means that we need to think of cryptocurrency transactions just as we think of stocks: We pay taxes anytime we sell a cryptocurrency and make a profit. The IRS views any transaction with cryptocurrency as two separate transactions: a sell and a buy transaction. For example, if we used a cryptocurrency to buy any service or product, then the IRS views that transaction as a sale of the cryptocurrency and then the purchase of another asset, which could be a cup of coffee or a different cryptocurrency. Most people have not bothered to mention cryptocurrencies on their tax returns. In 2015, which was one year after the IRS created the cryptocurrency tax rules, only 802 people mentioned cryptocurrencies at all on their tax returns; cryptocurrency company Coinbase now has more than 10 million customers. Thats more customers than Charles Schwab! In addition, Continue reading >>

Got Bitcoin, Ethereum, Or Ripple? Be Careful How You File Your Taxes

Got Bitcoin, Ethereum, Or Ripple? Be Careful How You File Your Taxes

Got Crypto? Be Careful How You File Your Taxes YOU KNOW THE OMINOUS FEELINGthat comes with wayward glances at a calendar any time after January 1stit starts as an inkling, and then, grows into something darker by the week, the closer you get to April 15th. And now, Tax Day, as ever, looms large. But this year, perhaps, is a bit different from the last fewyouve got a bit of money invested in cryptocurrency. And though currencies like Bitcoin, Ethereum, and Ripple are poised to transform the financial system (not to mention your bank account), where it concerns your taxes, regulations concerning crypto arent quite there yet. [Before we get into the answer, a quick caveat: we here at Futurism Dot Comarent remotely close to tax professionals. Honesty, even Certified Public Accountants (CPAs) and Enrolled Agents (EAs) the people you pay to handle your taxes arent totally sure how to approach some aspects of cryptos. Basically what were saying is not that you would but were telling you, explicitly, not to use this article as a definitive source of information on this matter. Like you, we hate doing our taxes, so were definitely not doing yours. Also, because we like you: Please, please, please, for the love of god and your freedom from a minimum security prison, consult a professional before you file your taxes.] One of the most appealing aspects of cryptocurrency, you may be thinking, is its anonymity. Doesnt that mean the government cant find my money?you might think.And, well, not exactly. For one, Bitcoin isnt all that anonymous. The parties on either end of a transaction are marked with pseudonyms . And its not that hard to link your pseudonym to your actual identity. Online vigilantes have unmasked extremist groups receiving donations via crypto; organizations such as Continue reading >>

If Youve Made Cash From Bitcoin In The Uk, You Could Face A Hefty Tax Bill: What You Need To Know

If Youve Made Cash From Bitcoin In The Uk, You Could Face A Hefty Tax Bill: What You Need To Know

If youve made cash from Bitcoin in the UK, you could face a hefty tax bill: What you need to know As the tax deadline fast approaches in the UK, those of you brave enough to have invested in the volatile world of cryptocurrencies, including Bitcoin, could be facing a hefty bill. As much as Bitcoin, and other virtual currencies, may seem like a quick route to a fast buck, Her Majestys Revenue and Customs (HMRC) has warned that such gains are not out of the reaches of the taxman. Plus, given the recent volatility around Bitcoin prices, many investors may not even be aware of the tax owed on their cryptocurrencies. In 2017, Bitcoin surged from around 710 to a peak of around 14,200, and is currently valued 6,040. Last month, it was reported the US Inland Revenue Service (IRS) compelled cryptocurrency exchange startup Coinbase to send data on 13,000 of its users as part of a tax evasion investigation. When we spoke to HMRC to get clarification on the UKs approach to taxing such gains, the message was clear: not reporting gains could amount to tax evasion. We will not hesitate to use the powers Parliament has made available to us to identify those who are intent on evading tax, an HMRC spokesperson told Alphr. South Korea follows China in cracking down on Bitcoin... and is considering a ban (again) The treatment of income received from, and charges made in connection with, activities involving cryptocurrencies will be subject to CT [corporation tax], IT [income tax] or CGT [capital gains tax] depends on the activities and the parties involved. Whether any profit or gain is chargeable or any loss is allowable will be looked at on a case-by-case basis taking into account the specific facts. Yet, despite the fact each case will be considered on the basis of its own facts and ci Continue reading >>

How To Calculate Taxes On Your Crypto Profits

How To Calculate Taxes On Your Crypto Profits

Profiting off crypto means making capital gains Reconsider thinking the IRS doesnt care about crypto. Take the IRSs recent legal case against Coinbase, one of the largest cryptocurrency companies in the world. In late 2016, it demanded Coinbases customer records in a bid to investigate potential tax fraud. A year later, a California federal court ordered Coinbase to hand over customer records of anyone transacting $20,000 or more in any year between 2013 and 2015. Why did the IRS want this information? Because it suspected many people incurred tax liabilities on their crypto purchases liabilities that had long gone unpaid. Make no mistake: Cryptocurrency is taxable, and the IRS wants in on the action. Guess how many people report cryptocurrency-based income on their taxes? According to the IRS, only 802 people did so in 2015. Thats a minuscule figure, seeing as 150 million people file a return each year. This means most individuals dont pay taxes on their crypto something that might change as more people are audited by the IRS. According to the US government, crypto isnt a currency. Instead, for most people its a capital asset think stocks, bonds, investment properties and so forth. If youve heard of capital gains and wondered what those are, just think of crypto. Did you buy bitcoin and sell it later for a profit? Thats a capital gain. If you sold it and lost money, you have a capital loss. So, taxes are a fact of life even in crypto. Thats the bad news. But theres good news: Figuring out your tax bill isnt as difficult as it sounds. Which IRS forms do I use for capital gains and losses? Use IRS Schedule D (Form 1040) Capital Gains and Losses and Form 8949 Sales and Other Dispositions of Assets. Calculating your crypto taxes for gains and losses takes just three steps Continue reading >>

Do I Have To Pay Taxes On Cryptocurrencies Like Bitcoin And Ethereum?

Do I Have To Pay Taxes On Cryptocurrencies Like Bitcoin And Ethereum?

Do I have to pay taxes on cryptocurrencies like Bitcoin and Ethereum? In most countries, if you cash out your gains by converting it to fiat then you would need to pay direct taxes (income tax). Note that most tax laws would categorize these gains as business income (and not capital gains) as cryptocurrencies are typically categorized as commodities rather than capital assets. long answer: Bitcoin is not governed or controlled by governments or banks. Hence they dont have any control over cryptocurrencies. That said,when you sell your Bitcoin and get fiat currency like US dollar, then youre liable for taxes as per your country on capital gain. Considering the growth of Bitcoin, you should only Buy and Hold. Take out in small amounts to avoid taxes. Buy and Hold, it wont disappoint you. You can still make lots of money out of it! Pro tip: Sign up using my invitation link and get $10 free in Bitcoin while making a purchase of >=$100 in Bitcoins. Sign up here and enjoy free bitcoins. If youre in India, you can sign up at Unocoin . Continue reading >>

What If You Can't Pay Taxes On Your Crypto Gains? - Coindesk

What If You Can't Pay Taxes On Your Crypto Gains? - Coindesk

Kirk Phillips is an entrepreneur, certified public accountant (CPA) and author of The Ultimate Bitcoin Business Guide: For Entrepreneurs & Business Advisors. The following article is an exclusive contribution to CoinDesks Crypto and Taxes 2018 series. Your attempt to get clarity around crypto tax brainteasers can result in some surprising and unexpected tax liabilities at this time of year. As weve seen through the CoinDesk crypto tax series , theres a whole new realm of tax considerations that didnt exist four years ago. Maybe youre caught in a crypto squeeze play , wondering how to pay tax liabilities by liquidating the crypto you dont want to liquidate. Perhaps youre finding out that some crypto you received atits highest historical priceis taxed as ordinary incomeand now its worth 30 percent of its former self. For example, you got paid in Xcoin on the date of its $32 historicalhigh, then the floor dropped out of the market, the price slid to $9 and you continued to HODL. Then you sell all your Xcoin at $9 to cover the tax and end up back at zero. These situations are not for the faint of heart. If you need more time to gather information for your crypto tax calculations, you can always file an individual extension on April 17 for tax year 2017. Importantly, extensions only extend the time to file, not to pay taxes. Filing tax returns and making the related tax payments are independent of, and parallel to, one another. Payments have to be timely to avoid penalties and interest, regardless of whether you file on time or extend your return. Generally speaking, if you made estimated tax payments for 2017 equal to or greater than your 2016 tax, then youre in the safe harbor for that big tax payment on your once-in-a-lifetime gains until the April deadline. For example, Continue reading >>

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