3 ms·
Exactly. It is an asset. So you only disclose when you sell?
by ransom1538 9y ago
Exactly. It is an asset. So you only disclose when you sell?
- tehlike 9y agoWhat does it mean to sell? People have already generated lots of taxable event when they started diversifying into other coins for example.
- heimatau 9y agoYup. That is a huge question.
- sp821543 9y agoIt is my understanding that trading one for another, (BTC to ETH, for example), is a taxable event thus has to be reported.
- tehlike 9y agoYes, exactly the way i am thinking (and probably IRS will think). This is the way it happens for stocks and pretty much everything.
- rubyfan 9y agoYou don’t disclose assets to the IRS, only income. If you disclose your income and pay tax on it then convert it to BTC today you aren’t obliged to disclose it. In theory after you sell it you’d have a capital gain to disclose.
- lstyls 9y agoNot true. There are reporting requirements for certain foreign assets, including cash in overseas accounts.
- rubyfan 9y agoDidn’t know, can you elaborate on that?
- lstyls 9y agoSorry for the delay! https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements https://www.irs.gov/businesses/comparison-of-form-8938-and-f...
- heimatau 9y agoDoesn't apply to crypto. Only have to report if the crypto is sold.
- krrrh 9y agoI guess the implication is that you have to report foreign assets specifically because it’s not easy for the IRS to obtain records from foreign financial institutions. Since it’s also not easy for them to obtain records from a decentralized crypto-currency then the same justification exists for adding these to a list of things you must report.
- em3rgent0rdr 9y agoThe law doesn't care whether the same justification exists. A bitcoin wallet in your house in US is not a foreign asset, since those bits (that representing private keys for bitcoin addresses) are physically in the US.
- krrrh 9y agoRight, the existing reporting law doesn’t pertain to assets stored decentralized “institutions” only foreign ones. Presumably that is why they are talking about changing the law.
- em3rgent0rdr 9y ago
- rubyfan 9y agoIf I pay taxes on my income earned in USD, then exchange it for Euros. If the Euros had a better exchange rate to dollars later, would I have to declare a capital gain if I exchange back for USD? What if instead of exchanging I just spent the Euros?
- jaycroft 9y agoIf you are a US citizen, then yes to both questions. Trading any asset for another (which would include spending EUR for goods) creates a taxable event, on which you must declare your gain on the sold asset based on its fair market value at the time of exchange. There are exemptions for certain types of property (notably section 1031 like kind exchanges for real property). I am not a tax attorney, and more specifically not your tax attorney, nor a certified accountant. https://www.law.cornell.edu/uscode/text/26 https://www.law.cornell.edu/uscode/text/26