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It is the exact same as exchanging mutual funds at your brokerage. Like an exchange I did just this morning: $10,000 VHDYX -> $10,000 VFIAX. It creates two or
by jermaustin1 9y ago
It is the exact same as exchanging mutual funds at your brokerage.
Like an exchange I did just this morning: $10,000 VHDYX -> $10,000 VFIAX.
It creates two orders a sell and a buy. I'm taxed capital gains on the $10k sale (about $600 gain) and the buy has nothing to do with it, until I sell it in 5 years.
- nonbel 9y agoThere is no sale for dollars involved in the OP's scenario. Is there an actual sell in your scenario or is it "virtual"?
- jermaustin1 9y agoThere is no "real" sell on Vanguard to go from one fund to another, but regulations require them to mark it as a sale, and to denote the cost basis of the sale.
- nonbel 9y agoInteresting, thanks.
- notyourday 9y agoIt also will be marked-to-market
- jermaustin1 9y agoInteresting, I have never heard that term. I'm pretty uneducated in finance. I just have done great on my Vanguard Mutual Funds, and I keep them going.
- saalweachter 9y agoTo use the programming lingo that I hope a majority of HN users still recognize, they're like a sequence point.
- sowbug 9y agoBartering is taxable as well. This was the case even before computers were invented. See, e.g., https://www.irs.gov/newsroom/bartering-produces-taxable-income-and-reporting-requirements https://www.irs.gov/newsroom/bartering-produces-taxable-inco...
- icedchai 9y agoThe difference is brokerages will actually issue you a 1099 form. The crypto exchange sites won't. Let's not kid ourselves... Nobody is going to be reporting crypto-to-crypto exchanges.
- xur17 9y agoIf you want to be compliant, and not commit tax fraud, you will. Just because it will require some effort to track you down doesn't make it ok.
- icedchai 9y agoYou and I may be compliant. The point is, most people won't.
- wbl 9y agoHow many convictions will it take?
- justblendin 9y agohttps://en.wikipedia.org/wiki/Calculus_of_negligence https://en.wikipedia.org/wiki/Calculus_of_negligence Premeditated tax-negligence is fraud according to the IRS, but the thinking remains. How many convictions will it take? Depends on how much is on the line.
- sebleon 9y agoSaavy consumers will definitely evade this. However, this tax is likely targeted at finance companies looking to “get into crypto” and will do everything by the book
- heisenbit 9y agoIt is not so that the ledger is encrypted.
- newfoundglory 9y ago