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If I buy BTC with USD, then later convert those BTC to ETH, how do I calculate my profit? Is it based on the difference between my initial purchase of USD and
by nextstep 9y ago
If I buy BTC with USD, then later convert those BTC to ETH, how do I calculate my profit? Is it based on the difference between my initial purchase of USD and the USD-equivalent value of those ETH? That doesn’t seem to make sense.
- vkou 9y agoYes, that is exactly how it works. When I buy GOOGL for $400/share, then trade it for APPL at a 1:5 ratio, if APPL on the day of the trade goes for $100/share, then my cost basis for GOOGL is $500/share. Otherwise, there would be an obvious tax loophole where instead of paying taxes on my gains in GOOGL, I'd trade it for another stock, then instantly sell the new stock (Which made no gains between me acquiring it, and selling it.) Just because I'm investing into magic internet money doesn't mean I shouldn't pay taxes on gains.
- nextstep 9y agoCan you trade GOOG -> AAPL without first converting to USD (i.e. selling the GOOG stock and then buying AAPL stock)?