My parents said I have to pay taxes for every coin I bought if I made gains on those coins

but I like sounding smrat

The only obvious answer is "pay your fucking taxes dummy" so I agree it's tiresome that stupid people constantly ask the question.

But this specific thread is copied verbatim from one yesterday. I doubt it's an user asking for real whether he should pay taxes, it was discussed at length yesterday. And of course the conclusion is always "yes pay your taxes." So who would be posting this and why?

Who would benefit from a campaign to prompt Americans to discuss whether they should pay taxes?
I'm asking for real, I don't know, I'm really curious who is posting this shit.

Reason I'm asking again is because I didn't get a conclusive answer.
All people said is "get an accountant" and "BRO YOU OWE TAXES"

All I want to know is:
1. Do I only have to pay taxes when I cash out? Or does transferring from crypto to crypto count too?
2. If the latter is true (which I hope it isnt) is it possible to owe more than my total portfolio value?

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1.
2. Yes

Use monero and your gains dissapear.. they can’t trace you

Wrong. This is a myth. You only pay taxes on profits after your trade or withdraw. If you invest 100$ and it drops to 80$ in value when you withdraw, you can actually take a loss and deduct from your net income for that years taxes.

yea i think it's this?

you just do
>what you put in
>what you took out
>if difference is positive, you pay taxes

at least in canada it's like this (i think)

i'm not sure about US

i think you're technically supposed to pay taxes on every profitable trade

but most people just report what they put in and took out?

So lets say I bought bitcoin at $10,000
It goes up to $20,000
I then go all in on shitcoin X using the bitcoin.

Lets say one X token cost $20,000 when I bought it, then it dumps to $1. And my short term tax is 40% for example.
I would have to pay the 40% tax on the bitcoin trade, even though my portfolio is worth $1, because buying another alt with it counts as cashing out?

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There's a dollar amount maximum to the amount of "loss" you can deduct though. And it's not a lot. Not nearly enough to offset the taxes owed on hundreds of thousands in gains.

Every trade or withdraw on an Exchange is a taxable event, while you need to file annually you only pay if there was a profit in that transaction. So all the stupid moves people made losing money will not be taxed.

wait i think it depends on your profit/loss on the year

so if you
>bought btc 10k
>btc goes 20k
>trade btc for shitcoin at 20k btc
>you now have 10k profit (this is taxable)
>shitcoin drops to $1
>you hold onto shitcoin (but you still owe 10k in taxes that year)

IF
>you sell shitcoin at $1, the same year you made profits, you will now be at a loss, thus you won't have to pay taxes?

someone please confirm, i'm just speaking from my head

so at the end of the year you sum up all of your profit (and subtract whatever losses you can)

that's what you're taxed?

i think the bigest thing regarding tax for me is whether i will incur business or personal tax

because here in canada it's 50% taxable for personal
100% taxable for business

personal = invest, don't day trade
business = frequently trade

That’s why I have an accountant lol. But I’m in Real estate and crypto as well as W2 and I pay very little in taxes legally due to all the deductions. Taxes are not scary just get an accountant if you make serious money so you don’t do something stupid that is a giant tax hit.

You made $10,000 on your bitcoin investment and owe taxes on that $10,000 you made.
Then you lost $19,999 on a terrible investment. Sucks for you. Yes you still owe taxes on the earlier $10,000 you made on bitcoin.
What do you think that just went away like you didn't make $10,000? You made a $10,000 profit and owe taxes on it. Sorry you lost the $19,999 on a separate investment, you probably should have set aside the part of that $10k you owed in taxes rather than gambling it on another shitcoin.

This isn't a difficult concept to grasp, I don't understand why it's so confusing for people.

Not sure about Canada but I pay 700$ a year to file all my taxes in US and it is well worth it so I would recommend the same in Canada. And keep your eye out for the day of the rake! Lol

just cash all your coins off an exchange and if the IRS calls tell them somebody stole your ID to setup the exchange account.

this advice is probably the simplest and best advice

Just make someone buy crypto off of you with cold hard cash and fuck the IRS.

In my opinion its more like if someone had Stock X, and exchanged that stock for Stock B.
Not a taxable event if no money was involved.

Guess the government doesn't see it that way though? I'll literally owe more than $1 million if what you said is how it works...

I thought it would work like this, which says trading stocks for stocks isn't taxable. Fuck
finance.zacks.com/tax-stocks-exchanged-through-merger-acquisition-11818.html

This or move to Slovenia where crypto is considered currency and not subject to capital gains tax.

Wrong you nigger, you net capital gains and losses off against each other. You can deduct up to 3k of NET capital losses.

t. Tax Knower

I am assuming he always made gains on his way to a 100k portfolio? Sorry I wasn't clear about the assumption. Also, I did say capital GAINS tax

This is is so fucking wrong.

OP it's even worse for you if you didn't hodl for a year. If you're actively trading and don't hold your investment for more than 1 year your net gains are "short term capital gains" and have a higher tax rate KEK

You're a fucking retard, congrats. You net them off.

It should apply to crypto also, there’s a rule where if you cannot provide a record of your transactions then your total investment is subject to a cost basis of $0. In addition to the advice here, I would at a minimum come up with some sort of running log of your trades with the equivalent usd value on each one noted. If you ever have to sit down with the IRS then the concept of “best effort” is something you want to be able to lean on.

so the retards who say they don't net off have never actually paid taxes..

What was his original investment?
Less current value.
Equals profit
Less than 100k in US means he will pay 15% tax on that profit
Any bullshit trades with profit or loss will offset each other BUT they need to be reported
So he will owe like 10-15 k max. No big deal

You net off realized gains and losses. "Realized" means you can only net them off if you have sold that investment. There is no tax (income OR deduction) on positions you hold. You net your realized gains and losses that occurred in the same year.

so there is not 3k limit on net losses?
everyone keeps saying this

it's the total profit/loss in that year? (no limits on losses?)

I assume people know this lol

just report when you CASH OUT only. the IRS/CRA only have 3 years to audit and there is no way they audit everyone so most likely you will be okay

Yes you can deduct max 3k losses for one year, excess is carried into next year so if your loss is 10k, you carry 7k till you write it all off or your gains cancel it out.

so if i have 100k of losses in one year,

it will take 33 years to incur those losses?

God damn it how is it that there are so many retards here giving false information? Let me break it down to you, and pay me if you think the information is useful.
Your gains are classified into two buckets, short term and long term capital gain and are taxed accordingly. Your losses are losses. What you do is take ALL your gains and losses for the year and net then against each other, the resulting number determines whether you'd have to pay taxes, or not.
If your net is positive, you pay the appropriate capital gain tax on the net amount. If your net is negative, you don't pay taxes, if your negative is more than 3k, you get to carry to the next years until ask written off.