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In the US (and many other countries) as soon as the cryptocurrency is “under your control” tax issues hit. Because of this the taxation and accounting for these
by kkielhofner 5y ago
In the US (and many other countries) as soon as the cryptocurrency is “under your control” tax issues hit. Because of this the taxation and accounting for these transactions is ridiculous:
- Get BTC from customer with X value in USD at time of sale
- Trade to USD with Y value at time of trade
- Track AND report gain/loss between X and Y values
…so in addition to all of the accounting and reporting overhead you get the added benefit of never really knowing what you’re selling anything for in your local currency.
Unless you’re a cryptocurrency maximalist or selling to a cryptocurrency audience this just doesn’t make any sense.
- mytailorisrich 5y agoThis is not specific to crypto. Rather this is simply how dealing with foreign currencies and tradable assets/securities works. What people might not realize is that these very standard accounting and taxation rules do apply to crypto.
- kkielhofner 5y agoThat's absolutely true but this is one of the many things that's "just handled" and abstracted away to the point of invisible with Stripe, etc. As a founder of my third startup with 1,000 different things to worry about I can't imagine adding this to that list. You're absolutely correct - even though the IRS released tax guidance and policy on cryptocurrencies in 2014 it's amazing how many people in the cryptocurrency community are unaware or willfully ignorant of the tax implications. When I've brought it up the overwhelming response has been "Yeah right taxes LOL" usually followed by some kind of ad hominem attack or anti-government rant.