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What you describe is how assets are typically taxed. And as far as I know, this includes currency you purchase and later sell for a profit. It's called a cost
by Pfhreak 5y ago
What you describe is how assets are typically taxed. And as far as I know, this includes currency you purchase and later sell for a profit.
It's called a cost basis.
Unless you are suggesting purchases made with Bitcoin (that aren't converted to fiat currency first) are taxed, which I'm not sure is the case.
- motohagiography 5y agoBut given the cash side is unenforcable because of this property of fungibility, it's more like casino chips where you pay taxes on them when you cash them in?
- Pfhreak 5y agoWell, you've recorded the cash transactions in a public ledger, so it may be more enforceable than one thinks.
- gruez 5y ago>it's more like casino chips where you pay taxes on them when you cash them in? I'm not sure whether the IRS would buy that argument. If you won $1M (in chips) at a poker tournament I doubt the IRS would let you report your winnings across 10 separate years to reduce your marginal rate. The tax is on income, which is earned when you won the tournament, not when you cash out the chips.
- secabeen 5y agoThe IRS would however probably allow you to treat the entire thing as a zero-cost basis and pay extra tax to not have to deal with the paperwork. Depending on the scale of the profits and the scale of the paperwork, that might be worth it.
- TheCoelacanth 5y agoI believe this is the same as any other fungible assets, e.g. if I buy a share of Google for $1000 and then a year later buy another share of Google for $2000, then sell one share.
- gknoy 5y agoIt sounds like it's more like RSUs or other stock grants, where your taxes vary based on when you received _those particular_ shares.