What the fuck do I on my taxes if I can’t remember how I bought some ETH from someone else a couple years ago...

That’s not how it works, retard. How are you going to explain when Coinbase sends your transaction history to the IRS?

Idk man just swing them 10 percent and call it a day.

never cash out never pay taxes

Or just don’t pay its fucking 5k. Take out 2k at a time

All transactions are taxable in terms of the capital you gain. Capital losses are deductible and if taken during a short-term (less than a year) are capped at 3000 dollars in a single year (I assume this is because they want you to keep your money in the market so the jews can steal it). Longterm losses do not have this same thing.

>can write off losses
>can get free money for merely 'investing'

Sounds like bullshit but I believe it.

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What do I do if someone sent me crypto thinking I was someone else? They sent me 3 ETH or some shit and asked me to give it back but I didn't.

based

if I cash out to fiat tomorrow, when do i have to file the taxes by? if i cash out on the first of 2021, could i wait to do my taxes by 2022? never learned this tax shit in school

its a calendar year. so anything cashed out in 2020 you pay in 2021, 2021 in 2022

>if I can’t remember
The answer is always zero basis, unfortunately. Unless you can provide evidence for purchasing the ETH at a specific price, you have to claim zero basis and pay gains tax on the entirety of the value of the asset when you register a sale (cash out, or transfer BTC for ETH, or whatever)

>Cashing out $5k
No, they won't care
You don't even need to really do your taxes if you make under $12k in a year due to the standard deduction
I say the above because it sounds like you're 18 or something
Anyway the IRS doesn't really care until you have $20k or more, especially being cashed out
For example they only sent those passive aggressive letters out to coinbase users if they had over $20k

What does zero basis mean? I’m in a similar situation where I have two wallets that somehow ended up with 4 ETH and 2 ETH respectively, and I have no fucking idea what I sold or did at the time to earn it. What I do know is that I probably sold footpics or rsgold for it during shitcoin season when everyone was trading on IDEX, but I don’t have proof of it. That 6 ETH was like $3.6k at the time in 2018 and I traded a bunch and ended up shitting the bed and now it’s worth $2k or some shit. I should have just kept that shit in their respective wallets, but I ended up moving that shit over to my main one. How much would that 2k be taxed if I decide to cash out now?

Use a crypto tax company. Or just look into Safex miners and don't worry about trading against whales who WILL fuck you eventually

Wait, so every year in the US you can just make a leveraged bet with $3000 in your account and if you get liquidated the tax man simply sends your money back?

You have to report all your transactions, but yes if you're a small investor and you get fucked in the ass to the tune of 3000 dollars you can write it off. Anything over 3000 dollars has to be rolled over to the next year's taxes.

Zero basis is what it is. You basically have no proof what your profit and loss is so you write the whole thing up as profit. You had no costs whatsoever, so you pay tax on the entirety of it. If you haven't realized profit but you moved it in and out of your wallet you have to pay zero basis on the first record of ETH that you hold, then report profit and loss from there, but with crypto every movement of your coins is considered a taxable transaction.

Say you had 6 ETH, and the earliest record you have is that it's worth $1200. Take that as your first taxable amount, $1200.

Then say the market price of ETH went up from $200 to $250, and you moved ETH into DAI. You pay a tax on ETH because you sold all 6 ETH at $250, meaning you pay a tax on a profit of $300. When DAI is transferred into your wallet, the exchange pays a tax or takes a loss on that depending on the value of DAI, which in this case is $1500.

Then let's say you move DAI back into ETH when ETH is worth $180. Assuming DAI is worth the same as it was when you bought it, you record no profit or loss. If you immediately sold your ETH for fiat at $150, you record a loss. If you sell that ETH for fiat at $200, you record a profit that will be taxed. If you sell that ETh at $200 for another crypto, say BTC, you still record the profit and get taxed.

It means you can't prove you paid anything for them so you get taxed on the full value they have today.
If you could prove (with documents) that you paid $1k for that ETH for example and it's now worth $2k you would only get taxed on the $1k difference.
Since you can't prove it the IRS assumes you paid $0 for the ETH and taxes you on the whole $2k you have.

Sounds like bullshit to me, why isn't everyone in the US doing this are they all clueless? All you need is $3000 in the stock market, you can make a five figure sum with options, if they shit the bed the tax man gives you your money back so you can repeat every year until the bet pays. It's literally free money.

Corporate tax fag here. It's not free money. It reduces your gross (taxable) income by up to $3K per year until the loss is exhausted on a rolling basis. It softens the blow, but you are not getting that entire $3K back. It depends on your tax bracket as far as how much it benefits you.

If I held that $2k for a year, and if I make less than 20k a year, would I still gain the benefits of long term capital gains tax despite it being claimed zero basis?

Does it fucking count as holding something for a year if I didn’t trade it but just withdrew it from IDEX or some shit? It’s been left in IDEX for a year but I withdrew it to my wallet 6 months ago or some shit.

Am I fucked if I started crypto in 2018 but never paid taxes on this shit? I only traded in 2018, never in 2019 or 2020. I’m guessing I’ll have to get all my previous trade history and use some cryptotax app or some shit?

all the irs does is send out shitty letters. thats all they fucken do. dont pay no mind to them. unless youre wesley snipes, they dont give a shit about your shitcoins. in b4 "enjoy your stay in prison". does anyone acutally know anyone that's gone to prison for not paying their taxes?

You'll have to pay the income tax on that $2k (which is some ridiculous amount because mutts lmao) when you withdraw it to fiat and that's it.
If they send you letters demanding cryptotax buttfuckery for $2k you should just move out of the united shitholes of america lmao. And try to grow your foreskin back haha.

The only good thing about amerimuttca is that if you do go to prison for tax evasion at least it's a low security one where you spend time with other financial misfits and not straight up nigger rapists.
Enjoy!

Generally because losing 3k in the first place is a bad thing as it means you have 3k less, losing 3k just so you get 3k back from the government isn't really a smart move. The point is to insulate traders from market fuckery, not reward people with free money.

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