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"And if Margaret pays for a car—or dinner for friends—with cryptocurrency, she likely owes tax on the transfer, much as if she paid for the car or the dinner wi

"And if Margaret pays for a car—or dinner for friends—with cryptocurrency, she likely owes tax on the transfer, much as if she paid for the car or the dinner with shares of Apple stock. The transfer is probably also taxable income to the recipient." Does this mean crypto will never be able to compete with USD as a currency? Since it has this added tax on transfers?

adabyron 5y ago
This is probably a better read than WSJ - https://www.investopedia.com/tech/taxes-and-crypto/ https://www.investopedia.com/tech/taxes-and-crypto/ Scroll down to personal purchases. "Currently, tax code allows taxpayers to exclude up to $200 per transaction for foreign currency exchange rate gain, if the gain was derived from a personal purchase, like a cup of coffee. This is known as a de minimis election. But there is no “de minimis” clause that exempts small transactions, which can create a very tangled tax problem if one is constantly trading crypto and also using it to buy goods and services." Of course keep reading & note the part where you can't deduct a loss either if you buy BTC at $60,000 & then it goes down to $50,000 because Elon Musk tweeted while you were buying a coffee or pair of jeans with your BTC.
SCUSKU 5y ago
The US government is incentivized to keep Bitcoin and others from going mainstream. Simply because removing the US dollar hegemony means the US can no longer continue to print money for deficit spending, and that sanctions would lose their teeth. I recall a TV show or movie where the Federal Reserve launched its own cryptocurrency, in which it was used for more surveillance. I could see that happening, I think the Chinese are already onto it.
- tablespoon 5y ago
  The US government has nothing to fear from Bitcoin, despite grandiose conspiracy theories to the contrary.
sickygnar 5y ago
Curious as well, especially with USDC and USDT. They are so convenient for sending arbitrarily large amounts of USD with instant settlement.

adabyron 5y ago

This is probably a better read than WSJ - https://www.investopedia.com/tech/taxes-and-crypto/ https://www.investopedia.com/tech/taxes-and-crypto/ Scroll down to personal purchases. "Currently, tax code allows taxpayers to exclude up to $200 per transaction for foreign currency exchange rate gain, if the gain was derived from a personal purchase, like a cup of coffee. This is known as a de minimis election. But there is no “de minimis” clause that exempts small transactions, which can create a very tangled tax problem if one is constantly trading crypto and also using it to buy goods and services." Of course keep reading & note the part where you can't deduct a loss either if you buy BTC at $60,000 & then it goes down to $50,000 because Elon Musk tweeted while you were buying a coffee or pair of jeans with your BTC.

SCUSKU 5y ago

The US government is incentivized to keep Bitcoin and others from going mainstream. Simply because removing the US dollar hegemony means the US can no longer continue to print money for deficit spending, and that sanctions would lose their teeth. I recall a TV show or movie where the Federal Reserve launched its own cryptocurrency, in which it was used for more surveillance. I could see that happening, I think the Chinese are already onto it.

tablespoon 5y ago
The US government has nothing to fear from Bitcoin, despite grandiose conspiracy theories to the contrary.

sickygnar 5y ago

Curious as well, especially with USDC and USDT. They are so convenient for sending arbitrarily large amounts of USD with instant settlement.