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No. This is a common way to think about it, but it's wrong imho. Because that money is real and it buys you real stuff. If you have that money one day and it is
by WA 6y ago
No. This is a common way to think about it, but it's wrong imho. Because that money is real and it buys you real stuff. If you have that money one day and it is gone the next, you effectively lost that money. It doesn't matter where it came from.
Think about it: You inherit $500k. You lose it through a scam or a bet or gambling. Do you think it doesn't matter? I mean, you didn't earn that money yourself, right?
There are no paper losses and no "unrealized gains". It's your money and if it's gone, it's gone. Doesn't matter how you earned it.
- shawnz 6y agoI agree with you, he lost real money. But I also agree with the other poster: it's hard to feel bad for him gambling away money that he got by gambling to begin with.
- ImprobableTruth 6y agoBut it's not real money, it's an asset! I think you have a wrong understanding of what unrealized gains are. It's not about whether you earned it yourself - it's about whether it's liquid cash or just an asset. Only once you sell your asset do you realize your gains.
- shawnz 6y agoAs I asked in the other part of this thread: Would you feel differently if he sold the bitcoins and then immediately bought them again before participating in the scam? Of course not. Even though that would make them "realized", that has no impact on the situation
- deleted 6y ago[deleted]
- Bancakes 6y agoEasy come, easy go. I was never planning on a $500k inheritance, it was just a good bonus.
- D13Fd 6y agoFor tax purposes, in the U.S., what he had at the time was an unrealized gain. So if he later went to convert that Bitcoin into U.S. dollars, he would have a taxable event (i.e., if he cashed out the whole thing, he would owe taxes on the difference between his basis and the value at the time). I don't know how it works in Germany though.
- isthisreality 6y agoThis would be a good way to launder Bitcoin to yourself without paying taxes on it. Could that be what this is?
- WA 6y agoGermany ditched the holding period a while back for stocks. You pay 25% plus a little bit (26.375% in reality) on every gain, no matter if you hold it for 10 years or for two seconds. Bitcoin is tax-free after a holding period of 1 year afaik. If you lose $500k, you don't owe taxes, congratulations. But you still lost money (even if you maybe only lost $300k, because the rest would've been taxes).