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The U.S. works the same way. You are taxed on the net short or long term capital gains not on every transaction. So if you made $1000 on one trade and lost $500
by keltex 7y ago
The U.S. works the same way. You are taxed on the net short or long term capital gains not on every transaction. So if you made $1000 on one trade and lost $500 on another you would only be taxes on the net $500 profit.
- nostrademons 7y agoYou're taxed only on the gain from the transaction, but you have to report every transaction (at least in theory - I'd bet that drug dealers being paid in crypto aren't reporting them, but if you're going to break the law, you're breaking the law). The issue isn't the tax bill, it's the amount of work you have to do to track the dollar value of the cryptocurrencies involved (which may not even be well-defined, since many cryptos aren't available for U.S. dollars) when you make a transaction.
- habosa 7y agoThat's actually not true right now. Every time you trade it's a taxable event. So if you went USD --> BTC --> ETH --> BTC --> USD you would need to show 4 transactions to the IRS. The total tax burden will look a lot like (Final USD - Total USD) * (Short Term Cap Gains Rate) but you can't just report it that way. In 2017 I mucked around with Crypto and accumulated about 50 transactions over ~5 currencies. Reporting was a monster pain in the ass.
- jandrese 7y agoGiven the libertarian bent of some people who are most attracted to Cryptocurrencies I'm guessing many don't report anything to the IRS voluntarily. Even regular capital gains are kind of a pain to report, especially when you've inherited the stocks from a deceased relative who kept no records about them.