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It does make sense. I buy Bitcoin at $1000 in March. I trade my Bitcoin for Ripple in December when Bitcoin is worth $20000 and Ripple is worth $3. I have $190
by trophycase 9y ago
It does make sense.
I buy Bitcoin at $1000 in March. I trade my Bitcoin for Ripple in December when Bitcoin is worth $20000 and Ripple is worth $3. I have $19000 in gains because that is a taxable event. Fast forward to April and my $20000 of Ripple is now $3500 and I owe about $9000 in capital gains taxes.
Even if I sold everything I can't cover what I owe because the losses on Ripple are in the next tax year and not offsetting. This is obviously a worst case scenario but you can see how this could get you in trouble
- antisthenes 9y agoThe post didn't specify it was all short term gains. But even if they are, you still get to deduct your losses from any future capital gains once you sell at a loss. You and a lot of other replies seem to think I was saying it's impossible and arguing against that. It's not. It's just highly improbably and extremely imprudent. Alternatively, his altcoins bounce back up, he sells them and this time pays the tax properly.
- votepaunchy 9y agoThe future capital gains may be at a much lower tax rate if spread over several years, so it doesn’t just cancel out.