3 ms·

Tax, if your country has capital gain tax you need to declare every single trade to real USD. When you are trading between crypto pairs you are not realizing an

by nickez 4y ago

Tax, if your country has capital gain tax you need to declare every single trade to real USD. When you are trading between crypto pairs you are not realizing any gain, thus you don't need to declare it. Until you eventually sell of course.

vgatherps 4y ago
99.999% sure the IRS is not going to accept "but it was technically USDC not USD". The main reason was that historically, crypto institutions tended to be no-questions-asked blacklisted from any real bank, so those who could get banking made stablecoins. Circle, who runs USDC, got banking access from some favorable VC connections iirc, and Tether .... who knows.
ne0flex 4y ago
If you're trading crypto pairs then that is considered a taxable event.[0] Many people owed taxes in 2017 because of that rule. It's not considered a like-to-like exchange. [0] https://www.coindesk.com/learn/crypto-capital-gains-and-tax-rates-2022/ https://www.coindesk.com/learn/crypto-capital-gains-and-tax-...
jefftk 4y ago
Are you sure? What I've read is that every cryptocurrency transaction realizes the gain/loss, including trading one currency for another. See https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions https://www.irs.gov/individuals/international-taxpayers/freq...
fomine3 4y ago
It's wrong as other comments said, but there are related use cases. If you have much XMR, want to evade tax, and want your assets to be stable: you can't exchange it to real USD because it will be followed by tax office. However just exchange it to USDT (between your crypto wallet, not wallet on exchange) won't be followed by your local tax office. Finally you still need to wash the money or need to use them for virtual things like NFT, but it works as temporary solution.

3 ms·

Tax, if your country has capital gain tax you need to declare every single trade to real USD. When you are trading between crypto pairs you are not realizing an

by nickez 4y ago

vgatherps 4y ago
99.999% sure the IRS is not going to accept "but it was technically USDC not USD". The main reason was that historically, crypto institutions tended to be no-questions-asked blacklisted from any real bank, so those who could get banking made stablecoins. Circle, who runs USDC, got banking access from some favorable VC connections iirc, and Tether .... who knows.
ne0flex 4y ago
If you're trading crypto pairs then that is considered a taxable event.[0] Many people owed taxes in 2017 because of that rule. It's not considered a like-to-like exchange. [0] https://www.coindesk.com/learn/crypto-capital-gains-and-tax-rates-2022/ https://www.coindesk.com/learn/crypto-capital-gains-and-tax-...
jefftk 4y ago
Are you sure? What I've read is that every cryptocurrency transaction realizes the gain/loss, including trading one currency for another. See https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions https://www.irs.gov/individuals/international-taxpayers/freq...
fomine3 4y ago
It's wrong as other comments said, but there are related use cases. If you have much XMR, want to evade tax, and want your assets to be stable: you can't exchange it to real USD because it will be followed by tax office. However just exchange it to USDT (between your crypto wallet, not wallet on exchange) won't be followed by your local tax office. Finally you still need to wash the money or need to use them for virtual things like NFT, but it works as temporary solution.