4 ms·

I mean, the tax implications of doing anything with crypto as an "investment" already made it a basically useless asset class to get into. Not to mention, anyo

by d33lio 6y ago

I mean, the tax implications of doing anything with crypto as an "investment" already made it a basically useless asset class to get into. Not to mention, anyone with half a brain knows that exchanges manipulate markets with favored liquidity providers. This is really kind of hilarious. I guess I'll have to lose my Ledger Nano S along with my firearms in my boating trip planned for late January ;).

xyzzyz 6y ago
What tax implications you speak of? The implications that you have to pay taxes on capital gains? That's not very pleasant, but it hardly makes it useless to invest in.
- wonderwonder 6y ago
  Every trade is a taxable event. If I buy btc with dollars and then trade that for eth and then trade my eth for neo, each of those transactions is taxable. If I finally trade my neo for dollars again, that transaction is also taxable. Definitely still a potentially very profitable asset class but the taxation method is brutal, versus a system like stocks where you buy the stock and when you sell it for dollars that's the taxable event.
  - wmf 6y ago
    AFAIK something like USD->EUR->GBP->AAPL is just as complex for taxes as USD->BTC->ETH->NEO. Don't make complex trades that aren't profitable enough to justify the paperwork burden.
  - xyzzyz 6y ago
    > Definitely still a potentially very profitable asset class but the taxation method is brutal, versus a system like stocks where you buy the stock and when you sell it for dollars that's the taxable event. I don't see the difference. When you buy GOOG stock, and want to trade it for AMZN stock, you sell it, and buy AMZN with proceeds. This generates taxable event. Sounds like exactly same situation as you describe.
    - wonderwonder 6y ago
      It would be like if you could trade GOOG for AMZN without having to sell GOOG first, just an exchange. They tax that swap. Versus taxing you only when you convert GOOG or AMZN to dollars. It like if I have a printer that I don't want anymore and you have a leaf blower and we trade. That transaction is taxed in cryptocurrencies.
      - xyzzyz 6y ago
        Yes, and IRS also taxes the swap of GOOG for AMZN. See[1]: > Amount realized. The amount you realize from a sale or exchange is the total of all the money you receive plus the fair market value (defined below) of all property or services you receive. The rules are exactly the same for stocks as for cryptocurrencies. There is no difference. [1] - https://www.irs.gov/publications/p544#en_US_2019_publink100072271 https://www.irs.gov/publications/p544#en_US_2019_publink1000...
- d33lio 6y ago
  In many cases unless you keep perfect records you end up paying cap gains and income tax.
  - xyzzyz 6y ago
    Yes, same as with stocks. How does it make cryptocurrencies "useless"?

by d33lio 6y ago

xyzzyz 6y ago

What tax implications you speak of? The implications that you have to pay taxes on capital gains? That's not very pleasant, but it hardly makes it useless to invest in.

wonderwonder 6y ago
Every trade is a taxable event. If I buy btc with dollars and then trade that for eth and then trade my eth for neo, each of those transactions is taxable. If I finally trade my neo for dollars again, that transaction is also taxable. Definitely still a potentially very profitable asset class but the taxation method is brutal, versus a system like stocks where you buy the stock and when you sell it for dollars that's the taxable event.
- wmf 6y ago
  AFAIK something like USD->EUR->GBP->AAPL is just as complex for taxes as USD->BTC->ETH->NEO. Don't make complex trades that aren't profitable enough to justify the paperwork burden.
- xyzzyz 6y ago
  > Definitely still a potentially very profitable asset class but the taxation method is brutal, versus a system like stocks where you buy the stock and when you sell it for dollars that's the taxable event. I don't see the difference. When you buy GOOG stock, and want to trade it for AMZN stock, you sell it, and buy AMZN with proceeds. This generates taxable event. Sounds like exactly same situation as you describe.
  - wonderwonder 6y ago
    It would be like if you could trade GOOG for AMZN without having to sell GOOG first, just an exchange. They tax that swap. Versus taxing you only when you convert GOOG or AMZN to dollars. It like if I have a printer that I don't want anymore and you have a leaf blower and we trade. That transaction is taxed in cryptocurrencies.
    - xyzzyz 6y ago
      Yes, and IRS also taxes the swap of GOOG for AMZN. See[1]: > Amount realized. The amount you realize from a sale or exchange is the total of all the money you receive plus the fair market value (defined below) of all property or services you receive. The rules are exactly the same for stocks as for cryptocurrencies. There is no difference. [1] - https://www.irs.gov/publications/p544#en_US_2019_publink100072271 https://www.irs.gov/publications/p544#en_US_2019_publink1000...
d33lio 6y ago
In many cases unless you keep perfect records you end up paying cap gains and income tax.
- xyzzyz 6y ago
  Yes, same as with stocks. How does it make cryptocurrencies "useless"?