6 ms·

I imagine a managed wallet like Coinbase would really help here. They could easily create a report on exactly how much you owe in capital gains. Managing this y

by pat2man 13y ago

I imagine a managed wallet like Coinbase would really help here. They could easily create a report on exactly how much you owe in capital gains. Managing this yourself could get a bit messy.

loumf 13y ago
The main thing that's a pain (extrapolating from stock) is if you buy and sell a lot. The tax is on the gain, but which one did you sell -- you need to keep track of each price you bought (and how many) and offset the amounts against sells. I think you are allowed to average, but this might not be beneficial with big swings.
sillysaurus3 13y ago
Please don't store most of your bitcoin in Coinbase. If Coinbase ever goes under, you'll lose all your bitcoin. It sucks when someone else loses your bitcoin for you.
- abhigupta 13y ago
  It is no different than having your money in multiple banks or brokers.
  - sillysaurus3 13y ago
    It's insanely different from having your money in banks. A bank is backed by the government. If a bank goes under, you still get your money. If Coinbase goes under, you get nothing or very little. Funds from Coinbase should be evacuated to your own secure cold storage wallet immediately after you purchase them. You should never hold a balance higher than 0BTC for any length of time on Coinbase. Follow this advice and you'll have your money forever. Don't follow it and you'll lose your money the moment Coinbase suffers any serious theft, a technical disaster, a rogue employee, or the founder steals coins. (I speak from experience, having lost a massive amount of money when Mt. Gox went under for one of the above reasons, which I probably won't get back.)
  - Smudge 13y ago
    Coinbase is not FDIC insured.
    - gnaritas 13y ago
      Neither is your computer or your safe. Coinbase is very likely much safer for the average consumer than anything they'd do themselves.
      - sillysaurus3 13y ago
        That's not true. If I had kept my funds in a secure cold storage wallet, I'd still have them. There are plenty of techniques for keeping your coins safe. Just find one and use it. I've heard Armory is pretty good. Coinbase is far more dangerous in comparison, because they can go under at any time for any reason. Human greed is a thing. Always remember that Coinbase has to rely on some employees to implement their systems, and those same employees can write some code to steal money from their systems.
        gnaritas 13y ago
        Are you the average user? I doubt it, what I said is very much true and you've offered nothing to disprove it.
        sillysaurus3 13y ago
        Sorry, you're right, I didn't provide enough detail. If the average user can figure out how to use bitcoin, then they can figure out how to use Armory. Most people have an old laptop or computer that they can afford to keep disconnected from the internet. If it's not connected to the internet, then it's not susceptible to hacks. It also offers a way of doing secure backups, so that if your computer is lost in a house fire, you'll still have your coins. Even if they don't have an old computer, spending $100 on one off of Ebay or whatever is possibly the best insurance payment they could make, because it's just a matter of time until any bitcoin exchange dies. Not only do you have yourself to worry about, but if you have children then you'll want them to inherit your wealth. Hard to do if your wealth vanishes because your preferred exchange went under.
IgorPartola 13y ago
Do you need to have it managed? Why not just have a service where you put in your addresses and it looks through the blockchain to find all the transactions you performed, etc. I believe as long as it keeps historical prices it could get very good results even if each BTC transaction doesn't log how much USD-et-al was involved.
- pat2man 13y ago
  Good point. Coinbase is also an exchange so it knows exactly how much you paid in and out BUT there's no reason why a service couldn't integrate to an exchange's API and do the same thing.
basseq 13y ago
I imagine the provider ecosystem will be the next nut to crack, both in terms of general regulation and requirements to issue 1099s and the like.
VLM 13y ago
How would they know when I mined the coins before I sent them there to be sold about 3 days later? Another question is, how can I figure it out? Back when software mining was profitable and difficulty levels were high 2 or low 3 digits, I just let the thing free run for months as a "nice"-d process. So I'm not even sure when I mined them, other than "a long time ago" and then got rid of them late last summer/fall.

by pat2man 13y ago

I imagine a managed wallet like Coinbase would really help here. They could easily create a report on exactly how much you owe in capital gains. Managing this yourself could get a bit messy.

loumf 13y ago

The main thing that's a pain (extrapolating from stock) is if you buy and sell a lot. The tax is on the gain, but which one did you sell -- you need to keep track of each price you bought (and how many) and offset the amounts against sells. I think you are allowed to average, but this might not be beneficial with big swings.

sillysaurus3 13y ago

Please don't store most of your bitcoin in Coinbase. If Coinbase ever goes under, you'll lose all your bitcoin. It sucks when someone else loses your bitcoin for you.

abhigupta 13y ago
It is no different than having your money in multiple banks or brokers.
- sillysaurus3 13y ago
  It's insanely different from having your money in banks. A bank is backed by the government. If a bank goes under, you still get your money. If Coinbase goes under, you get nothing or very little. Funds from Coinbase should be evacuated to your own secure cold storage wallet immediately after you purchase them. You should never hold a balance higher than 0BTC for any length of time on Coinbase. Follow this advice and you'll have your money forever. Don't follow it and you'll lose your money the moment Coinbase suffers any serious theft, a technical disaster, a rogue employee, or the founder steals coins. (I speak from experience, having lost a massive amount of money when Mt. Gox went under for one of the above reasons, which I probably won't get back.)
- Smudge 13y ago
  Coinbase is not FDIC insured.
  - gnaritas 13y ago
    Neither is your computer or your safe. Coinbase is very likely much safer for the average consumer than anything they'd do themselves.
    - sillysaurus3 13y ago
      That's not true. If I had kept my funds in a secure cold storage wallet, I'd still have them. There are plenty of techniques for keeping your coins safe. Just find one and use it. I've heard Armory is pretty good. Coinbase is far more dangerous in comparison, because they can go under at any time for any reason. Human greed is a thing. Always remember that Coinbase has to rely on some employees to implement their systems, and those same employees can write some code to steal money from their systems.
      - gnaritas 13y ago
        Are you the average user? I doubt it, what I said is very much true and you've offered nothing to disprove it.
        sillysaurus3 13y ago
        Sorry, you're right, I didn't provide enough detail. If the average user can figure out how to use bitcoin, then they can figure out how to use Armory. Most people have an old laptop or computer that they can afford to keep disconnected from the internet. If it's not connected to the internet, then it's not susceptible to hacks. It also offers a way of doing secure backups, so that if your computer is lost in a house fire, you'll still have your coins. Even if they don't have an old computer, spending $100 on one off of Ebay or whatever is possibly the best insurance payment they could make, because it's just a matter of time until any bitcoin exchange dies. Not only do you have yourself to worry about, but if you have children then you'll want them to inherit your wealth. Hard to do if your wealth vanishes because your preferred exchange went under.

IgorPartola 13y ago

Do you need to have it managed? Why not just have a service where you put in your addresses and it looks through the blockchain to find all the transactions you performed, etc. I believe as long as it keeps historical prices it could get very good results even if each BTC transaction doesn't log how much USD-et-al was involved.

pat2man 13y ago
Good point. Coinbase is also an exchange so it knows exactly how much you paid in and out BUT there's no reason why a service couldn't integrate to an exchange's API and do the same thing.

basseq 13y ago

I imagine the provider ecosystem will be the next nut to crack, both in terms of general regulation and requirements to issue 1099s and the like.

VLM 13y ago

How would they know when I mined the coins before I sent them there to be sold about 3 days later? Another question is, how can I figure it out? Back when software mining was profitable and difficulty levels were high 2 or low 3 digits, I just let the thing free run for months as a "nice"-d process. So I'm not even sure when I mined them, other than "a long time ago" and then got rid of them late last summer/fall.