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that doesn't make sense. so basically if you trade BTC for ETH for BTC for USD you have to pay taxes 3 times on the same money?
by solotronics 9y ago
that doesn't make sense. so basically if you trade BTC for ETH for BTC for USD you have to pay taxes 3 times on the same money?
- deleted 9y ago[deleted]
- dragonwriter 9y ago> so basically if you trade BTC for ETH for BTC for USD you have to pay taxes 3 times on the same money? No, on the BTC -> ETH transaction, your capital gain is the difference between the dollar-equivalent cost of the ETH at the time of the trade and the dollar-equivalent cost of the BTC at purchase. On the ETH to BTC transaction, it's the same thing, with “ETH” and “BTC” reversed (for the “new” BTC). On the BTC to USD transaction, it's the actual quantity of dollars minus the dollar-equivalent cost of the BTC at the previous transaction. In each transaction, you pay taxes on the net gain from the prior transaction. You don't pay taxes on the same income more than once.