Crypto tax?

anon0

anon0

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Do you guys report your capital gains/losses from crypto when purchasing GLP’s for tax purposes?
 
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You're supposed to claim any gains or income on your taxes. I made some money a couple years and Coinbase had a tax document for me. The IRS treats it as property as of 2023.
www.irs.gov

Taxpayers need to report crypto, other digital asset transactions on their tax return | Internal Revenue Service

FS-2024-12, April 2024 — The Internal Revenue Service reminds taxpayers they must answer the digital asset question and report all digital asset related income when they file their 2023 federal income tax return. Taxpayers should also keep these reporting guidelines in mind for 2024.
www.irs.gov www.irs.gov
 
Chili777 said:
You're supposed to claim any gains or income on your taxes. I made some money a couple years and Coinbase had a tax document for me. The IRS treats it as property as of 2023.
www.irs.gov

Taxpayers need to report crypto, other digital asset transactions on their tax return | Internal Revenue Service

FS-2024-12, April 2024 — The Internal Revenue Service reminds taxpayers they must answer the digital asset question and report all digital asset related income when they file their 2023 federal income tax return. Taxpayers should also keep these reporting guidelines in mind for 2024.
www.irs.gov www.irs.gov
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If you buy crypto and immediately send it to someone else, like to purchase goods, does that count as a taxable event?
 
anon0 said:
If you buy crypto and immediately send it to someone else, like to purchase goods, does that count as a taxable event?
Click to expand...
No. You create a tax event when you sell crypto, incurring either a gain or a loss. The exchange will generate a Form 1099DA for you at the end of the year.

Buying crypto and then sending it to a vendor does not constitute a tax situation.
 
latviantower said:
No. You create a tax event when you sell crypto, incurring either a gain or a loss. The exchange will generate a Form 1099DA for you at the end of the year.

Buying crypto and then sending it to a vendor does not constitute a tax situation.
Click to expand...

When you exchange the crypto for goods, you’re selling the crypto for the product’s value in USD, which is a taxable event as a loss or gain (or a scratch that just has to be recorded).
 
woundcarping said:
When you exchange the crypto for goods, you’re selling the crypto for the product’s value in USD, which is a taxable event as a loss or gain (or a scratch that just has to be recorded).
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But the exchange (Coinbase, etc) that generates the tax document has no way of knowing the value (in any denomination) of your purchase. They only know you bought xx.xx digicoin asset for $zz.zz. If you offload said digicoin to a cold wallet, there’s no sale of the digital asset for the exchange to report.
 
latviantower said:
But the exchange (Coinbase, etc) that generates the tax document has no way of knowing the value (in any denomination) of your purchase. They only know you bought xx.xx digicoin asset for $zz.zz. If you offload said digicoin to a cold wallet, there’s no sale of the digital asset for the exchange to report.
Click to expand...

An individual’s tax accounting liabilities are not the responsibility of the exchange. It is the individual’s responsibility to report capital gains, which are realized when the crypto is exchanged for goods in this example. Form 8949 and Sch D are where it’s reported.

Telling people it’s not a reportable exchange because it’s from a cold wallet and not reported by the exchange is incorrect.

To be clear, the value change of the crypto from purchase to disposal is what’s taxable. Reporting exchanges in crypto is required, even if using stable coins.
 
woundcarping said:
An individual’s tax accounting liabilities are not the responsibility of the exchange. It is the individual’s responsibility to report capital gains, which are realized when the crypto is exchanged for goods in this example. Form 8949 and Sch D are where it’s reported.

Telling people it’s not a reportable exchange because it’s from a cold wallet and not reported by the exchange is incorrect.

To be clear, the value change of the crypto from purchase to disposal is what’s taxable. Reporting exchanges in crypto is required, even if using stable coins.
Click to expand...
I am not debating the legal basis for your argument (and ignoring that it’s unenforceable), but using that logic - the $$$ I saved in the mattress in 2020 and just dug out to buy peps in 2026 - I can claim the 25% loss in value of the $$$ due to inflation as a long term capital loss? I know, I know, crypto is technically a commodity and treated as property subject to gains and losses. But still, as we shift to the increasing acceptance of crypto as currency…

If it’s not on an exchange and therefore trackable and automatically reportable, I’m not telling anybody about it. Anonymity is one of the main benefits of crypto. Nunya bizness.
 
anon0 said:
Do you guys report your capital gains/losses from crypto when purchasing GLP’s for tax purposes?
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1. Unless you have crypto full time and not just for these transactions, you are not likely to hold it long enough to realize any gains or losses.

2. If you use a stable coin, you will have zero gains or losses regardless how long you hold it.
 
mainefungi said:
1. Unless you have crypto full time and not just for these transactions, you are not likely to hold it long enough to realize any gains or losses.

2. If you use a stable coin, you will have zero gains or losses regardless how long you hold it.
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This.

I use stablecoins (mainly USDC) for purchases. This keeps any gains or losses extremely negligible—and often zero—so there's very little (if anything) to report on taxes.

I also keep my everyday purchase transactions completely separate from my crypto trades and investments, which makes tax reporting much cleaner and simpler overall.
 
MikerJecksun said:
This.

I use stablecoins (mainly USDC) for purchases. This keeps any gains or losses extremely negligible—and often zero—so there's very little (if anything) to report on taxes.

I also keep my everyday purchase transactions completely separate from my crypto trades and investments, which makes tax reporting much cleaner and simpler overall.
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I use stablecoins too. Do you have to report personal purchases or transactions on your tax return, even if there are minimal or no gains or losses with stablecoins?
 
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anon0 said:
I use stablecoins too. Do you have to report personal purchases or transactions on your tax return, even if there are minimal or no gains or losses with stablecoins?
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I filed using an online service and it walked me through the IRS crypto reporting form, entering the data provided by Coinbase on the Form 1099DA. It was only concerned with gains and losses from buying and selling crypto on the exchange. There was nothing about transfers of crypto (stablecoins or any crypto coins) for purchasing goods and services.

Short answer - no. I’ve debated on here with others about this, but if it ever came to audit, if you said you purchased goods and services using stablecoin, there’s not enough fluctuation to show a gain or loss (>$1).
 
Chili777 said:
You're supposed to claim any gains or income on your taxes. I made some money a couple years and Coinbase had a tax document for me. The IRS treats it as property as of 2023.
www.irs.gov

Taxpayers need to report crypto, other digital asset transactions on their tax return | Internal Revenue Service

FS-2024-12, April 2024 — The Internal Revenue Service reminds taxpayers they must answer the digital asset question and report all digital asset related income when they file their 2023 federal income tax return. Taxpayers should also keep these reporting guidelines in mind for 2024.
www.irs.gov www.irs.gov
Click to expand...
I'm also supposed to tell my state if I buy items online, but I don't. 😱 🥲
 
IshimaruKenta said:
I'm also supposed to tell my state if I buy items online, but I don't. 😱 🥲
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I don't have to anymore. Everything I buy online is reported to my state by the vendor. Been that way for 3 years now. It's coming.
 
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