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What would happen if someone was to lose access to their wallets? Would they still have to pay taxes? If my memory serves me right, close to 4 million bitcoins
by malikNF 9y ago
What would happen if someone was to lose access to their wallets? Would they still have to pay taxes? If my memory serves me right, close to 4 million bitcoins are missing.
- ng-user 9y agoIf I'm correct, I believe you only pay taxes when you realize the gain. So if you never sell you'll never owe taxes? Can someone confirm this?
- clay_to_n 9y agoYes, these are capital gains taxes. If you buy a bunch of crypto in a year, and sell none, you owe no capital gains taxes for that year. You only pay capital gains taxes on them in the years where you sell. Keep in mind that in the IRS's eyes, any exchange (like BTC -> LTC) counts as a sale, and so does buying goods with crypto (like buying a video game with BTC).
- YCode 9y agoRegardless of whether you lose them you pay taxes when you make a taxable transaction, being either exchanging FIAT to crypto or crypto to a different crypto.
- jjeaff 9y agoIf you itemize deductions, and the loss is large enough, you can deduct a loss or theft. So if you mined and then traded $100k in Bitcoin for Ethereum and then the Ethereum was stolen, you would use form 4684 to claim the loss against your taxable income. But I haven't heard of anyone doing this yet and I can imagine it would get some scrutiny from the IRS, seeing as it would be hard to prove a loss or theft.
- chanfest22 9y agoYou'll want to complete form 4684: https://www.irs.gov/pub/irs-pdf/f4684.pdf https://www.irs.gov/pub/irs-pdf/f4684.pdf and speak with a tax professional. See more about which forms to fill out here: https://www.cointracker.io/faq#tax-forms https://www.cointracker.io/faq#tax-forms