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> “As with cash transactions, businesses that receive cryptoassets with a fair-market value of more than $10,000 would also be reported on,” the Treasury Depart

by aazaa 5y ago

> “As with cash transactions, businesses that receive cryptoassets with a fair-market value of more than $10,000 would also be reported on,” the Treasury Department said in a report on tax-enforcement proposals released Thursday. Nothing to see here. It's part of a pattern of explicitly stating that for regulatory purposes, Bitcoin works like a currency, but for tax purposes Bitcoin works like an asset.

sandworm101 5y ago
>> cryptoassets with a fair-market value Lol. Good luck defining a "fair" value for a cryptocurrency. The day the IRS goes after people trading currency A everyone will leap onto currency B, hammering the value of A. Nothing in that market if fair or logical.
- Pfhreak 5y ago
  It's not hard at all, any reasonable group of people will say, "what was the price on coinbase (or equivalent) when you sold?"
  - Majromax 5y ago
    That's also the valuation to be used for tax reporting, since exchanging cryptocurreny is a deemed disposition for capital gains taxes.
- gruez 5y ago
  I think you're reading this wrong. They're not going after coins that have values of over $10,000 (eg bitcoin), they're going after any crypto transactions that have value over $10,000. So it doesn't matter whether you're trading 0.25 BTC or 25000 DOGE, they both have USD value of over $10,000 and have to be reported.
- dahfizz 5y ago
  "fair value" is just a financial term meaning "price traded on the open market"[1]. It makes no qualitative judgement about if that price is "fair" in the colloquial sense. [1] This is trivial to do with equities (top-of-book bid/ask prices are the fair). Currencies are a little trickier because your relationship with the exchange determines the quotes you see. Certainly, currency swaps do have a fair, but defining it is a little trickier.
Analemma_ 5y ago
Even currency is an asset for tax purposes: if you make a bunch of money trading forex you have to pay capital gains on that. There's nothing out of the ordinary regarding how cryptocurrency is treated here.
- ThrustVectoring 5y ago
  Foreign exchange trading is usually on the futures market, and the futures contracts are an extremely standard financial asset. I believe the tax differences alluded to are of the form "If you buy a currency and then later exchange it for goods and services, you have to pay capital gains taxes if it was Bitcoin and you don't if it was Euros"
  - kasey_junk 5y ago
    Most forex trading happens otc on spot or forward contracts not on futures.
  - ska 5y ago
    If I understand it correctly the latter isn't true. There are usually allowances for "vacation" type amounts in physical currency but they are small. It is different in that futures contracts etc. show up a cap gain on a standard asset. But just doing the exchange directly with currency can land you in a situation where you have taxable foreign income.
  - gostsamo 5y ago
    If you spend more than 10000 euro or dollars in this case, your bank must report the transaction. Same with btc.
- cargo8 5y ago
  Eh not really true as they've explicitly stated every single swap / transaction for crypto should be reported vs having any sort of threshold

by aazaa 5y ago

sandworm101 5y ago

>> cryptoassets with a fair-market value Lol. Good luck defining a "fair" value for a cryptocurrency. The day the IRS goes after people trading currency A everyone will leap onto currency B, hammering the value of A. Nothing in that market if fair or logical.

Pfhreak 5y ago
It's not hard at all, any reasonable group of people will say, "what was the price on coinbase (or equivalent) when you sold?"
- Majromax 5y ago
  That's also the valuation to be used for tax reporting, since exchanging cryptocurreny is a deemed disposition for capital gains taxes.
gruez 5y ago
I think you're reading this wrong. They're not going after coins that have values of over $10,000 (eg bitcoin), they're going after any crypto transactions that have value over $10,000. So it doesn't matter whether you're trading 0.25 BTC or 25000 DOGE, they both have USD value of over $10,000 and have to be reported.
dahfizz 5y ago
"fair value" is just a financial term meaning "price traded on the open market"[1]. It makes no qualitative judgement about if that price is "fair" in the colloquial sense. [1] This is trivial to do with equities (top-of-book bid/ask prices are the fair). Currencies are a little trickier because your relationship with the exchange determines the quotes you see. Certainly, currency swaps do have a fair, but defining it is a little trickier.

Analemma_ 5y ago

Even currency is an asset for tax purposes: if you make a bunch of money trading forex you have to pay capital gains on that. There's nothing out of the ordinary regarding how cryptocurrency is treated here.

ThrustVectoring 5y ago
Foreign exchange trading is usually on the futures market, and the futures contracts are an extremely standard financial asset. I believe the tax differences alluded to are of the form "If you buy a currency and then later exchange it for goods and services, you have to pay capital gains taxes if it was Bitcoin and you don't if it was Euros"
- kasey_junk 5y ago
  Most forex trading happens otc on spot or forward contracts not on futures.
- ska 5y ago
  If I understand it correctly the latter isn't true. There are usually allowances for "vacation" type amounts in physical currency but they are small. It is different in that futures contracts etc. show up a cap gain on a standard asset. But just doing the exchange directly with currency can land you in a situation where you have taxable foreign income.
- gostsamo 5y ago
  If you spend more than 10000 euro or dollars in this case, your bank must report the transaction. Same with btc.
cargo8 5y ago
Eh not really true as they've explicitly stated every single swap / transaction for crypto should be reported vs having any sort of threshold