am I liable to taxes when:
>buying defi crypto with eth
>every exchange from eth -> shitcoin -> back to eth?
>changing from crypto to tether/usdc/dai?
>what if I still use coinbase hypothetically and change my crypto to USD but just want to hold gains there?
>what if I only withdraw a portion of my crypto holdings because i invested 99% of my savings into crypto and need some real money to pay my bills?
What country
america
Yeah, you're liable for everything, basically. Whether or not the IRS ever finds out is another story. If you use Coinbase, they will find out. And if you are trading within one year, you are gonna owe short term capital gains tax at your income tax rate.
Wouldn't you only owe on the profits that you actually cash out?
Also looking for these answers. So you only have to pay taxes after you cashout/convert to USD?
This is my question too. if in total I put in like $3000 into various cryptos but withdrew $1000 so I'm not making a profit then wouldn't I be free from taxes?
I assumed it was if you withdrew at a profit compared to the total amount you deposited for that calendar year
no, the IRS actually expects you to pay taxes for holding crypto, it's retarded.
but also if you half ass it and try to figure out profits and losses and get it wrong well, you're not an accountant, if they decide to audit you (highly unlikely unless you're dealing with large sums of money) I think it would be difficult to hold you criminally liable. Worst case they jew you out of some of your profits.
So pretend this is the circumstance.
I put in $10k this year, I profit $1k. They tax me on the $1k profit? Next year I just hold the $11k and profit another $1k. They would just tax me on the new $1k profit?
Why would they tax you on holdings? They don't tax me for holding in a savings account that has interest, that could be considered an investment because you're profiting. Am I misunderstanding this? Either way, I'm getting a tax pro next year