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That's not how this would work... I lost ~1,000 BTC and ~10,000 LTC in ~2011. I couldn't write it off at even the current value at the time if I wanted to write

That's not how this would work... I lost ~1,000 BTC and ~10,000 LTC in ~2011. I couldn't write it off at even the current value at the time if I wanted to write it off I would have to write it off at my cost basis which is the value when I mined them which was barely 50 dollars iirc. That's what my tax guy said at least if this is wrong let me know because I won't ever be paying capital gains tax again if I can write it off at current value.

cosmojg 5y ago
> I won't ever be paying capital gains tax again if I can write it off at current value. I'm in a similar boat. I honestly can't wait until the tax rules around cryptocurrencies are finally fully hashed out, clarified, and published.
3np 5y ago
CW is not a US tax resident afaik
nullc 5y ago
Wright's past tax scam is a bit more subtle than what you and (probably) the prior poster imagine. AU has a program where if you spend money on R&D you can get a refundable tax credit-- not just a deduction, but like EITC in the US they'll actually cut you a check. Wright spun up a collection of companies that engaged in no business (or research) except claiming these tax credits. According to his own companies documentation, all in all he claimed to have performed $200m in research and requested $65m in credits. The first year he attempted this he did it with smaller values and they paid out, but in later years he tripped audit alarm bells. The AU tax office immediately started asking where he got the $200 million that he claims he spent on research. This is the origin of Wright claiming to have invented Bitcoin: he claimed he had some enormous trove of bitcoin's held overseas and that his companies were funded by taking out loans against them. Wright made a massive amount of forgeries to support his claims across a couple years of fighting with the ATO. The tax office thoroughly debunked and discredited wright's lies and forgeries and found against him, ordering him to repay the money. At that point Wright took the show on the road, literally: He fled AU while the police were raiding his offices, and started selling shares of his fictional fortune and fictional intellectual property to others in order to cover the AU clawback and finance his lifestyle. Since then his life has been a series of forced moves, lie after lie in a growing snowball to delay the collapse of his con. For example, for a while he held off his "investors" (victims) by claiming that the Bitcoins were in trust and would be delivered by a bonded courier in Jan 2020 (like that scene in back to the future 2) -- but after that date came and went he claimed that the coins were delivered by were stolen from him by hackers that hid a wifi pineapple in his home and that now he's going to get them back by suing Bitcoin developers to backdoor the system to return them to him.
- iamben 5y ago
  Thank you! This is going to make a great movie at some point :-)
asdfasgasdgasdg 5y ago
Yeah the cost basis analysis sounds correct. You have to realize gains, and pay taxes on them, before subsequent losses would be deductible. (Or else you have to start from a higher basis and lose money, and realize those losses.) This works the same with traditional financial instruments.

cosmojg 5y ago

> I won't ever be paying capital gains tax again if I can write it off at current value. I'm in a similar boat. I honestly can't wait until the tax rules around cryptocurrencies are finally fully hashed out, clarified, and published.

3np 5y ago

CW is not a US tax resident afaik

nullc 5y ago

Wright's past tax scam is a bit more subtle than what you and (probably) the prior poster imagine. AU has a program where if you spend money on R&D you can get a refundable tax credit-- not just a deduction, but like EITC in the US they'll actually cut you a check. Wright spun up a collection of companies that engaged in no business (or research) except claiming these tax credits. According to his own companies documentation, all in all he claimed to have performed $200m in research and requested $65m in credits. The first year he attempted this he did it with smaller values and they paid out, but in later years he tripped audit alarm bells. The AU tax office immediately started asking where he got the $200 million that he claims he spent on research. This is the origin of Wright claiming to have invented Bitcoin: he claimed he had some enormous trove of bitcoin's held overseas and that his companies were funded by taking out loans against them. Wright made a massive amount of forgeries to support his claims across a couple years of fighting with the ATO. The tax office thoroughly debunked and discredited wright's lies and forgeries and found against him, ordering him to repay the money. At that point Wright took the show on the road, literally: He fled AU while the police were raiding his offices, and started selling shares of his fictional fortune and fictional intellectual property to others in order to cover the AU clawback and finance his lifestyle. Since then his life has been a series of forced moves, lie after lie in a growing snowball to delay the collapse of his con. For example, for a while he held off his "investors" (victims) by claiming that the Bitcoins were in trust and would be delivered by a bonded courier in Jan 2020 (like that scene in back to the future 2) -- but after that date came and went he claimed that the coins were delivered by were stolen from him by hackers that hid a wifi pineapple in his home and that now he's going to get them back by suing Bitcoin developers to backdoor the system to return them to him.

iamben 5y ago
Thank you! This is going to make a great movie at some point :-)

asdfasgasdgasdg 5y ago

Yeah the cost basis analysis sounds correct. You have to realize gains, and pay taxes on them, before subsequent losses would be deductible. (Or else you have to start from a higher basis and lose money, and realize those losses.) This works the same with traditional financial instruments.