The purchase of the car would be subject to a “sales tax” of which there is none with bitcoin. The sale of that car for more than the purchase price would create a tax event - capital gain. Or capital loss. When you buy $200 worth of Bitcoin that 200 is the cost basis by which tax is then calculated when there is a disposition. If it is sold for 200 no tax. Is sold for 150 capital loss. 250 capital gain. Are we on the same page?
That is not income tax. That is a transaction tax. In Canada we have Sales tax of 13% in Florida as you know it’s 6%. There is no sales tax applicable to Bitcoin transactions
I think you’re on the right track overall. You’ll want to list out each transaction on IRS form 8949
I wouldn’t expect Coinbase to supply you with a 1099-K as they only supply one to folks with 200+ transactions totaling 20K or more.
I think uncle Sam just wants to get paid, they shouldn’t get mad at you for paying taxes on your 200K profits. It seems not very many folks are reporting last year’s gains so they’ll probably be happy with you next year. You surely don’t want one of the IRS’s ten investigators coming after you
This site has a list of some bitcoin tax accountants for your reference. Quite a few in SF and surrounding areas. If you only have a few transactions it shouldn’t be that hard to calculate. I just used a basic capital gains tax calculator here to calculate my gains from a handful of BTC and LTC transactions from 2017. I like it because it calculates the state tax as well as the federal. Hope this helps. I’m just learning this crypto tax stuff too. It’s really great to hear you will take some maid profits and put it back into the project.
@SwissPrivateBanker, a regular here, may have some of the credentials you are looking for.
Sorry didn’t follow the conversation, but:
I have over 1m daily withdrawl on polo and bittrex.
and no limit on major exchange and OTC desks.
To cash out US clients, I use banque Pictet or Julius Bär
anyone can contact me on telegram @swisspb
have a nice w.e guys.
oh by the way I am off on Saturday, so won’t probably come back to you before Sunday.
My reddit post for reference:
US tax implications was the question. Interesting post. I read your reddit post and it was very interesting. Do you have experience in US tax law or are connected with anyone here ? Thank you.
You could transfer to gdax, using any of the 4 coins coinbase supports. Then trade to USD (Not usdt). I think they are federally insured and then you could take 10k per day out. Thus you can move $ when u want and dont have to worry what happens to the crypro market. I have used this process and it is very simple and fast, a couple days to post.
Just read your post on Reddit. It’s really interesting @SwissPrivateBanker . Obviously you must be an expert in the investment, bank field.
I think your advices are helpful and may be even more and more valuable for most of us one day.
You’re Oliver, right? You must know well how to move in this area, so i won’t forget your name
I went to a crypto conference yesterday and they had a couple of informative sessions on taxation and regulation. Here are a couple of slides that I thought were particularly useful:
Sorry for the poor image quality, but maybe this might be helpful
Careful with that Like-Kind Exchanges section. The IRS modified that section of the code to “Real Property” from just “Property” so the deferred tax treatment noted in this slide is not applicable to cryptocurrency.
Apparently still applicable to real estate though, which I find interesting.
Paying tax on realestate gains when parlaying those gains into another realestate venture would stifle the real estate market. There are restrictions.
Very true. The presenter mentioned this. He said that the area is still gray, though. He also said that if you’re feeling daring you could get a lawyer to write a legal opinion on your behalf in support of treating your crypto:crypto trades as like-kind exchanges for tax purposes. But, it would still be a risky play.
At the legal and regulatory sessions, one of the lawyers that presented said that the regulatory bodies don’t really want to put down firm guidance (I.e., they like the gray state of affairs). Personally, I think it’s because they want the leeway to pick and choose who they prosecute.
There is also this: