BTC and Taxes

[pistonpump]

I ain't reporting anything see how it goes I seriously think they won't even know

 

[UnholyAlliance]

I ain't reporting anything see how it goes I seriously think they won't even know

I have a rather low balance in my 2 wallets and haven't touched them.

 

[Lethalius]

I appreciate all the answers from everyone! The way I see it, I haven't realized any gains for tax purposes (cost basis) by buying BTC and transferring to an external wallet. I have only paid fees to buy BTC and withdrawal it to an external wallet (as a gift to friends). This probably explains why I do not see a form 1099-B in my Cash App documents. Now, if someone has received bitcoin and converted it to cash in their financial account, then I can see where they would be potentially liable to tax consequences.

 

[goback2013]

I transferred and received enough money through bitcoin and cash app this past year to buy a small house in some states. Didn't pay a dime in taxes. Just filed my regular W2, that's it. Already got both my federal and state returns back a week or two ago.

That's cool. They're still ironing out the kinks.
Within 5yrs hopefully they don't put those ~100k new agents to work and start auditing mysterious BTC txns

 

[goback2013]

I have a rather low balance in my 2 wallets and haven't touched them.

That's the thing. You'll have to transfer to multiple wallets. Keeping a low balance and then have them sit for a while.

 

[K1]

Who the hell told you the bitcoin blockchain stored IP addresses??? LOL. Even if that were true aren't all of us masking that at all times?

Many wallet providers log your ip addy...Even some desktop wallets log ip addies. A lot of the major exchanges have been doing this for some years now to be readily available to comply with LE requests (always check the TOS on the exchanges you use monthly to see any changes they make).

Many don't bother with maskers...The same as many still use gmail in this game, knowing that gmail funnels messages.

Funny thing is when we had a forum over on AN for crypto during the huge rush, many where sharing wallets with up to 3-5 others as we all learned this sector and some had a guy on the other side of the planet managing their portfolios entirely. Eventually when things started the downturn, that guy burned everyone he could and screwed off. Most of us were left with nothing more than a lesson to learn lol.

 

[goback2013]

Many wallet providers log your ip addy...Even some desktop wallets log ip addies. A lot of the major exchanges have been doing this for some years now to be readily available to comply with LE requests (always check the TOS on the exchanges you use monthly to see any changes they make).

Many don't bother with maskers...The same as many still use gmail in this game, knowing that gmail funnels messages.

Funny thing is when we had a forum over on AN for crypto during the huge rush, many where sharing wallets with up to 3-5 others as we all learned this sector and some had a guy on the other side of the planet managing their portfolios entirely. Eventually when things started the downturn, that guy burned everyone he could and screwed off. Most of us were left with nothing more than a lesson to learn lol.

Those who responded that the blockchain doesn't doesn't store IPs are correct.
However the blockchain is fronted by node server applications that can log IPs

Remember the blockchain and node servers are two separate components.

So at this point it's just a matter of technicalities/semantics.

 

[K1]

Those who responded that the blockchain doesn't doesn't store IPs are correct.
However the blockchain is fronted by node server applications that can log IPs

Remember the blockchain and node servers are two separate components.

So at this point it's just a matter of technicalities/semantics.

Correct, it is the wallet provider that you need to be aware of...Running your own node is the safest way to deal with bitcoin. But not many at all, including myself know how to do that.

 

[K1]

Question for you guys that have cashed out btc as an investment...Now say you ride up and then move into USDT until bottom and move back into BTC - do you have to claim the USDT amount on your taxes as a cash out, how would you work that?!

I have a small amount in btc and was thinking of starting to play that game a bit with back and forth from BTC to USDT to BTC...But if it's a taxable event on each move, I'm not going to bother and will just continue to wait for that target price. Trying to search things like this you get the back and forth responses but I can't find anything in stone?! I just don't want to play those games with the govt, so want to make sure that if they want their cut on each move, I'm just not going to bother with it.

 

[UnholyAlliance]

Question for you guys that have cashed out btc as an investment...Now say you ride up and then move into USDT until bottom and move back into BTC - do you have to claim the USDT amount on your taxes as a cash out, how would you work that?!

I have a small amount in btc and was thinking of starting to play that game a bit with back and forth from BTC to USDT to BTC...But if it's a taxable event on each move, I'm not going to bother and will just continue to wait for that target price. Trying to search things like this you get the back and forth responses but I can't find anything in stone?! I just don't want to play those games with the govt, so want to make sure that if they want their cut on each move, I'm just not going to bother with it.

I'd just hold till the price gets to where you want it then cash out so there be just one taxable event where you'd then get that 1099-K from the exchange you cashed out from.

 

[K1]

I'd just hold till the price gets to where you want it then cash out so there be just one taxable event where you'd then get that 1099-K from the exchange you cashed out from.

Yeah, I was thinking if it currently isn't that they are definitely going to make it a taxable event...Best to not even bother and just stick to the plan.