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Say you're way, way up in your Bitcoin investment, and you yse part of the gains to buy a $10 toaster with the equivalent amount of Bitcoin (let's assume no tax
by amorphid 9y ago
Say you're way, way up in your Bitcoin investment, and you yse part of the gains to buy a $10 toaster with the equivalent amount of Bitcoin (let's assume no tax in the toaster itself).
Do you realize a $10/gain, and owe money on that? If yes, let's say you return the toaster, and your Bitcoin is refunded. Do you still pay taxes?
- aggronn 9y agoYes. The point is that when you "trade" BTC for something, you're selling it. We differentiate between a sale and a trade colloquially based on whether currency is involved, but currency isn't that special--its just another good. You realize your gain when you sell your thing in exchange for some other thing. Moreover, if you bought the toaster, and sold it for $20 in BTC, you would have profited $10 and would need to pay taxes on it.