3 ms·

The event doesn't lead to a capital gain.

dmoy 9y ago
Ok my knowledge of tax is shaky at best, but this is confusing. Timeline: day 1: you buy bitcoin (or mine it and take tax as gross income), bitcoin is valued at $1k USD / bitcoin, you bought 1 bitcoin day 10: you use the $100 in your debit card to buy many beers, bitcoin is valued at $1.1k USD / bitcoin day 10 +15 minutes: something sells some of your bitcoin to replenish $100 in your debit card You now have 10/11th of a bitcoin, valued at $1000 USD, plus $100 of taxable gain for which you probably need to pay the IRS like $15 or something. Or what's wrong in my timeline there?
- Frogolocalypse 9y ago
  I would suggest contacting a tax-accountant in your jurisdiction if you are unclear of your obligations. Every place will have different requirements.
  - dmoy 9y ago
    K I'll ask my CPA in a bit
  - dmoy 9y ago
    Ok yo, at least for US jurisdiction you would need to report those individual bitcoin sales as taxable cap gains events (either loss or gain depending on the cost basis). Does whatever exchange you're using make calculating cost basis easy? Like do they send you an 8949 or all the details easy to fill out? Otherwise that sounds like a huge pain to get everything straight for every purchase (even if it's just daily sales). If the exchange makes it easy it might not be that bad. My 8949 / sched D already got like dozen+ entries on it, what's a few dozen more? lol. But if the exchange doesn't provide easy cost basis and makes you calc it on your own, ugghh no thanks. They also went into some detail about wash sales, which is going over my head. But yea this sounds like it would vastly complicate your tax preparation. Unless you just don't report it and cross your fingers that you don't get audited I guess? Of course, this is now 3rd hand from a CPA, and only applies for US federal taxes.
    - Frogolocalypse 9y ago
      I don't live in the US. Good info to have in the US if you do though.
MarkSweep 9y ago
If that is true, there should exist cards that let you load other assets on them to cover the cost of spending. Like a card that sells your Google stock to cover the cost of your beer. The ability to sell capital assets without paying tax should make these cards very popular. If these cards do not exist or are not popular, I would take that as evidence that selling a capital asset is taxable, whether or not it was triggered by a card purchase.
- Frogolocalypse 9y ago
  It is true where I come from. America is not the only country in the world you know. In fact, it is one of many. I have no desire to live there again TBH.

dmoy 9y ago

Ok my knowledge of tax is shaky at best, but this is confusing. Timeline: day 1: you buy bitcoin (or mine it and take tax as gross income), bitcoin is valued at $1k USD / bitcoin, you bought 1 bitcoin day 10: you use the $100 in your debit card to buy many beers, bitcoin is valued at $1.1k USD / bitcoin day 10 +15 minutes: something sells some of your bitcoin to replenish $100 in your debit card You now have 10/11th of a bitcoin, valued at $1000 USD, plus $100 of taxable gain for which you probably need to pay the IRS like $15 or something. Or what's wrong in my timeline there?

Frogolocalypse 9y ago
I would suggest contacting a tax-accountant in your jurisdiction if you are unclear of your obligations. Every place will have different requirements.
- dmoy 9y ago
  K I'll ask my CPA in a bit
- dmoy 9y ago
  Ok yo, at least for US jurisdiction you would need to report those individual bitcoin sales as taxable cap gains events (either loss or gain depending on the cost basis). Does whatever exchange you're using make calculating cost basis easy? Like do they send you an 8949 or all the details easy to fill out? Otherwise that sounds like a huge pain to get everything straight for every purchase (even if it's just daily sales). If the exchange makes it easy it might not be that bad. My 8949 / sched D already got like dozen+ entries on it, what's a few dozen more? lol. But if the exchange doesn't provide easy cost basis and makes you calc it on your own, ugghh no thanks. They also went into some detail about wash sales, which is going over my head. But yea this sounds like it would vastly complicate your tax preparation. Unless you just don't report it and cross your fingers that you don't get audited I guess? Of course, this is now 3rd hand from a CPA, and only applies for US federal taxes.
  - Frogolocalypse 9y ago
    I don't live in the US. Good info to have in the US if you do though.

MarkSweep 9y ago

If that is true, there should exist cards that let you load other assets on them to cover the cost of spending. Like a card that sells your Google stock to cover the cost of your beer. The ability to sell capital assets without paying tax should make these cards very popular. If these cards do not exist or are not popular, I would take that as evidence that selling a capital asset is taxable, whether or not it was triggered by a card purchase.

Frogolocalypse 9y ago
It is true where I come from. America is not the only country in the world you know. In fact, it is one of many. I have no desire to live there again TBH.