5 ms·
Nope. If you mine cryptos or receive them as income they’re reported as income. You also have to report gains if you spend them or trade them for another crypto
by kentm 9y ago
Nope. If you mine cryptos or receive them as income they’re reported as income. You also have to report gains if you spend them or trade them for another crypto currency.
- tunesmith 9y agoThe signup promotion in 2016 was for 5000 or 6000 lumens. Historically it looks like in 2016, 6000 lumens would have been worth five or ten bucks. So I guess that should be reported as income back then although it approaches being a rounding error. At some point, stellar converted lumens to stellar. Anyone know if that would be considered a taxable event? Did that change my basis?
- sokoloff 9y agoNot a tax pro, but I would treat any involuntary conversion similar to a corporate action where you got new shares for old shares, the new shares inherited the basis of the old shares, and would generally not be a taxable event. This is assuming it’s analogous to a tax-free spinoff event in the equities world.
- toast0 9y agoYou only get to treat a corporate action as a non-taxable event if the event meets certain requirements and follows certain forms. As cryptocoins aren't actually shares in a corporation, I don't think you're going to get a non-taxable conversion.
- sokoloff 9y agoThere is a general doctrine of substance over form. If the substance of the transaction is that "coin A became renamed to coin B with no other changes", that is likely to eventually be judged by the tax court to be a non-taxable event. An individual tax filer can take a position that has a reasonable justification without penalty. You're citing existing precedents/case law that has been decided. The cryptocurrency cases have not yet been adjudicated by the tax court, so as an individual filer, I would be comfortable taking any reasonably justifiable position and defending it in audit if needed.
- toast0 9y agoI don't think the general doctrine applies in this case, given that the law is written to require specific form for no apparent reason, and there is precedent that otherwise meeting the requirement but not following the prescribed form does not result in the desired outcome. I would put more weight on the possibility of considering it a 1031 like-kind exchange, than a tax free merger/reorganization . Although I don't have a lot of exposure to the 1031 rules to know if there's a clear objection there.
- mkirklions 9y agoThis is bad for everyone. Holy crap do we need reform.
- maxerickson 9y agoWhat reforms do you propose? It seems perfectly reasonable to me that income is income regardless of whether it is dollars or magic beans and that gains on investments are taxed largely without regard for the form of the investment.
- AYBABTME 9y agoI'd expect that converting from 1 cryptocurrency to another doesn't count as a gain until it's turned back into a country issued currency. They're basically the same unusable[1] asset under a different umbrella. [1]: if we're pragmatic about it, cryptocoins can't be used for much on their own
- sokoloff 9y agoThis is no different than selling one Vanguard fund and buying a different one. There is a notional to/from USD implied in the conversion, even though Vanguard lets me do it in a single transaction.
- AYBABTME 9y agoI thought there was something about selling/buying an asset of the same class within a certain period not triggering a tax event or something? The thing that tax-loss harvesting is based off.
- sokoloff 9y agoYou might be thinking of one of two things: 1. Wash sale rules (where buying a substantially identical security within 30 days before or after a sale-for-a-loss disallows the loss) 2. Section 1031 exchanges