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Discussion Starter #1
As the 2019 tax season kicks off on Jan. 27, the taxman is expecting you to disclose whether you had any cryptocurrency transactions last year.

The IRS asks the following question on the first page of Schedule 1 of the individual income tax return:

“At any time during 2019, did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency?”

Note: There is no Statute of Limitations on filing a false return so this question has to be answered accurately.
 

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Dog Lives Matter
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I'm not sure what they are going to gain by asking that question. It could just be a survey question. Given its nature, cryptocurrencies are untraceable.

It could open the possibility of an invasive audit that would require disclosure.

As the government tries to move us toward a cashless society, they want to be able to track everything. Cryptocurrencies stand in their way. I cannot see where we will ever get to a cashless society. If they push that too far, the underground barter economy will simply expand.

There are three federal institutions where you are treated as guilty until you prove yourself innocent: federal prosecution (I've told this story many times), the IRS, and the Customs Department. Be careful when you deal with any of them.
 

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Discussion Starter #3
I'm not sure what they are going to gain by asking that question. It could just be a survey question. Given its nature, cryptocurrencies are untraceable.

It could open the possibility of an invasive audit that would require disclosure.
The taxpayer is required to respond to all questions on the 1040, the question is not optional.

Cryptocurrencies are traceable.

Failure to answer the question will result in a follow up from the IRS.

An inaccurate answer will cause major problems for the taxpayer if the inaccurate answer is identified at some future time, like in a future audit. An inaccurate answer will flag the return for years into the future.
 

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My answer is no regardless of the truth.

Anti regulation to the grave.

Cute the OP already wants to convince people here to answer truthfully. I'd check him out as he is probably an IRS plant. No true survivalist or crypto early adopter would ever accept those terms.

Sent from my Note 8 using Tapatalk
 

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D. Gibbons is a bad man
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My answer is no regardless of the truth.

Anti regulation to the grave.

Cute the OP already wants to convince people here to answer truthfully. I'd check him out as he is probably an IRS plant. No true survivalist or crypto early adopter would ever accept those terms.

Sent from my Note 8 using Tapatalk
Loosen the tinfoil. :D: Expanded taxes will be required to keep you in the retirement you expect Uncle Sam to provide. Virtual currencies are fungible assets people.

I'm not sure what they are going to gain by asking that question. It could just be a survey question. Given its nature, cryptocurrencies are untraceable.
Untraceable until you accept a $ amount in exchange and it ends up in your current account with a US bank.
 

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Loosen the tinfoil. :D: Expanded taxes will be required to keep you in the retirement you expect Uncle Sam to provide. Virtual currencies are fungible assets people.

Untraceable until you accept a $ amount in exchange and it ends up in your current account with a US bank.
There is no obligation to use exchanges that practice KYC.

Physical wallets are a thing.

Untraceable if done properly. Traceable but identifiable should I say.

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Let's say you did have a bitcoin transaction.
When does it become taxable?

I presume it's only if you had a gain...

I do understand that the tax forms ask you to confess any additional
income they didn't have a category for.
[ 2018 Schedule 1 Line 21 ]
 

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Discussion Starter #9
Let's say you did have a bitcoin transaction.
When does it become taxable?

I presume it's only if you had a gain...

I do understand that the tax forms ask you to confess any additional
income they didn't have a category for.
[ 2018 Schedule 1 Line 21 ]
I think the IRS said it was a capital transaction so the taxable amount would be the net of gains and losses in the same way as stock transactions. If you trade them professionally you will probably get some breaks like people who trade stocks professionally.

This page has some links that cover cryptos:

https://www.irs.gov/businesses/small-businesses-self-employed/virtual-currencies
 

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Let's say you did have a bitcoin transaction.
When does it become taxable?

I presume it's only if you had a gain...

I do understand that the tax forms ask you to confess any additional
income they didn't have a category for.
[ 2018 Schedule 1 Line 21 ]
I suspose there are three posabilities.

Capital gains on cash to BTC to cash transactions
Capital gains on asserts sold for BTC ( ie selling appreciated stock for BTC)
Income earned in BTC ( real world, or mining)

I’m sure their first catagory is their focus. Both my opinion and the one they are already trying to persue back tax’s on.

It’s interesting that foreign bank accounts have a de minimus exception, while crypto does not.
 

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Just pay your taxes. Google bitcoin tax software. Export your trade data into the software. Done .takes ten minutes.
 

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Looks like the taxation angle is where we really find out
whether a cryptocurrency is "money" or not.

If I hold a US dollar for a period of time and it GAINS value
[ as in a period of deflation ]
will I owe a tax on it?

I think the answer is that I would not.
 

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I think the IRS said it was a capital transaction so the taxable amount would be the net of gains and losses in the same way as stock transactions. If you trade them professionally you will probably get some breaks like people who trade stocks professionally.

This page has some links that cover cryptos:

https://www.irs.gov/businesses/small-businesses-self-employed/virtual-currencies
if you did home mining, can you deduct your equipment that you purchased for that as a loss? Too hot in Georgia for mining apparently, lol.
 

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if you did home mining, can you deduct your equipment that you purchased for that as a loss? Too hot in Georgia for mining apparently, lol.
You can certainly zero out the profits, but as to deducting a loss, consult a tax professional. IRS is not too keen on allowing losses from hobbies or non actively operated enterprises. Actually, if they consider it a hobby, you can’t deduct losses, only expenses.

I would think it’s easy to claim mining as a business, but prehaps not an active one. Again rules change yearly.
 
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