5 ms·

> If I buy 60000 XRP for 4 BTC, what is my cost basis? For the BTC? The USD value at the time you bought them. > Do I have to keep track of how much those bit

by kentm 9y ago

> If I buy 60000 XRP for 4 BTC, what is my cost basis? For the BTC? The USD value at the time you bought them. > Do I have to keep track of how much those bitcoins were worth when I traded? Yes > What if I don't have that data? You can get the transaction date via the block chain or your exchanges reporting and then lookup the USD value at the time. > How is that calculation supposed to account for actual liquidation costs if I liquidate to pay my taxes? Liquidating to pay taxes is another taxable event. That’s the same as if you did this with equities.

saosebastiao 9y ago
> You can get the transaction date via the block chain or your exchanges reporting and then lookup the USD value at the time. What if the exchange I traded on doesn't have a USD Fiat pairing? Can I use any price from any exchange that day? Can I report $0.06/BTC for an xrp sale on 4/16, the date of the major coinbase flash crash? Does it have to be the exact price at the exact time? Can I choose the USD value of the KRW/BTC market on Bithumb?
- bringtheaction 9y ago
  > Can I use any price from any exchange that day? You should use the fair market value.
  - saosebastiao 9y ago
    So any price from any exchange at any time during the day? You haven't clarified a thing by telling me to use the fair market value, because there is no standardized way to determine fair market value. These aren't stable mature markets, a blink of the eye and the market may be transacting at +/-10%. Determining fair market value is the primary problem with cryptocurrency taxation. If you're lucky enough to be trading in USD paired currencies, great...you can use actual transaction values. But the vast majority of crypto trades aren't with any fiat pair.
    - s73v3r_ 9y ago
      The fact that these things are extremely volatile is not the IRS's problem. You are the one responsible for recording the details of your trade.
      - saosebastiao 9y ago
        I did record the details of my trade. What I didn't record was the concurrent status and details of some completely unrelated market on a completely unrelated exchange that establishes some sort of mythical fair market value denominated in USD that so far has no canonical way of being calculated anyway. Nobody can answer the question in any precise way, the IRS guidance on the issue is barebones and not informative at all, and my CPA can't figure it out either. The best we can do is take a best guess that makes it look like I'm not stiffing the IRS. I want to pay my taxes. I believe crypto should be taxed. But when you get into the situation where well meaning people have to take guesses at what is appropriate, and differences between seemingly simple rules of thumb can result in 20+% disparities in taxes owed, you're gonna have a bad time no matter how diligent you are.
        paythetax 9y ago
        The IRS appreciates when you try. It sounds like you’re deliberately trying to fuck them and make excuses. I know crypto is young and naïve, not unlike those who deal in it, but if it’s one organization you don’t mess with, it’s the IRS. Unless you’re wealthy enough to hold dual citizenship and/or buy off some senators, you WILL lose. Alternatively, if you can’t handle the tax reporting, hire an accountant, or don’t day trade cryptocurrencies. The IRS won’t give two shits about your smug “what about”s when they garnish your wages for eternity.
    - deleted 9y ago
      [deleted]
- rspeer 9y ago
  It kind of sounds like you're trying to think of tax law as some sort of CTF programming game where you're supposed to find the exploit. That's definitely not what tax law is. You should report your taxes as honestly as possible, using reasonable prices for things.
  - deleted 9y ago
    [deleted]

by kentm 9y ago

saosebastiao 9y ago

> You can get the transaction date via the block chain or your exchanges reporting and then lookup the USD value at the time. What if the exchange I traded on doesn't have a USD Fiat pairing? Can I use any price from any exchange that day? Can I report $0.06/BTC for an xrp sale on 4/16, the date of the major coinbase flash crash? Does it have to be the exact price at the exact time? Can I choose the USD value of the KRW/BTC market on Bithumb?

bringtheaction 9y ago
> Can I use any price from any exchange that day? You should use the fair market value.
- saosebastiao 9y ago
  So any price from any exchange at any time during the day? You haven't clarified a thing by telling me to use the fair market value, because there is no standardized way to determine fair market value. These aren't stable mature markets, a blink of the eye and the market may be transacting at +/-10%. Determining fair market value is the primary problem with cryptocurrency taxation. If you're lucky enough to be trading in USD paired currencies, great...you can use actual transaction values. But the vast majority of crypto trades aren't with any fiat pair.
  - s73v3r_ 9y ago
    The fact that these things are extremely volatile is not the IRS's problem. You are the one responsible for recording the details of your trade.
    - saosebastiao 9y ago
      I did record the details of my trade. What I didn't record was the concurrent status and details of some completely unrelated market on a completely unrelated exchange that establishes some sort of mythical fair market value denominated in USD that so far has no canonical way of being calculated anyway. Nobody can answer the question in any precise way, the IRS guidance on the issue is barebones and not informative at all, and my CPA can't figure it out either. The best we can do is take a best guess that makes it look like I'm not stiffing the IRS. I want to pay my taxes. I believe crypto should be taxed. But when you get into the situation where well meaning people have to take guesses at what is appropriate, and differences between seemingly simple rules of thumb can result in 20+% disparities in taxes owed, you're gonna have a bad time no matter how diligent you are.
      - paythetax 9y ago
        The IRS appreciates when you try. It sounds like you’re deliberately trying to fuck them and make excuses. I know crypto is young and naïve, not unlike those who deal in it, but if it’s one organization you don’t mess with, it’s the IRS. Unless you’re wealthy enough to hold dual citizenship and/or buy off some senators, you WILL lose. Alternatively, if you can’t handle the tax reporting, hire an accountant, or don’t day trade cryptocurrencies. The IRS won’t give two shits about your smug “what about”s when they garnish your wages for eternity.
  - deleted 9y ago
    [deleted]
rspeer 9y ago
It kind of sounds like you're trying to think of tax law as some sort of CTF programming game where you're supposed to find the exploit. That's definitely not what tax law is. You should report your taxes as honestly as possible, using reasonable prices for things.
- deleted 9y ago
  [deleted]