Bitcoin and taxes

[Bluewhistle]

So in looking over my taxes this year I noticed a question that says something like "do you invest in cryptocurrency?" Or something like that. With the small amounts that I use for transactions is this worth even mentioning? Does anybody else report that they use cryptocurrencies when only making like $500 in transactions a year?

To me it seems like if you did a job for cash and just pocketed it. Am I way off base here? Only done anything with crypto this year so still a newb.

 

[Mac11wildcat]

That question is aimed at cashing out BTC, not transacting. But fuck no, I wouldn’t report it unless I made major moves with crypto.

 

[MindlessWork]

If you only made small transactions with crypto like less than $1k and not carrying a large balance in your wallets then you can say no to the crypto questions.

Exchanges will only report to the IRS if you made many large transactions.

 

[Dax]

This thread is timely I just met with my accountant today the different exchanges report to the IRS now it's a felony to mark no if you own crypto on your taxes and they want to know if you bought with it as well because it could of been at a gain just remember you can't hide money profit unless your a millionaire then it's okay!
I'm merely conveying what he told me but I kind of agree with mac11wild

 

[MindlessWork]

This thread is timely I just met with my accountant today the different exchanges report to the IRS now it's a felony to mark no if you own crypto on your taxes and they want to know if you bought with it as well because it could of been at a gain just remember you can't hide money profit unless your a millionaire then it's okay!
I'm merely conveying what he told me but I kind of agree with mac11wild

SO the IRS now wants to know if you dabbled in crypto no matter how small the amount? Wonder if they can check, but they won't know which exchanges you used unless they report all accounts opened to the IRS no matter how much the balances are.

 

[Dax]

SO the IRS now wants to know if you dabbled in crypto no matter how small the amount?

That's what I gathered from him.

Crypto and Bitcoin Taxes in the US: 2020 Edition | Coinbase

Wonder if they can check, but they won't know which exchanges you used unless they report all accounts opened to the IRS no matter how much the balances are.[/QUOTE]

When you sign up to the exchanges you have to use your name, addy, email that info supposedly has been turned over to Steve Mnuchin.

 

[Millard]

SO the IRS now wants to know if you dabbled in crypto no matter how small the amount? Wonder if they can check, but they won't know which exchanges you used unless they report all accounts opened to the IRS no matter how much the balances are.

Coinbase will provide info to the IRS as will most other exchanges with a connection to the U. S.

Bitcoin purchases and transactions are treated as capital gains/losses. You are legally required to report to IRS just like any other capital transaction. This is nothing new.

Attention Coinbase customers: The IRS may soon know you purchased Bitcoin

 

[Bluewhistle]

All of the info on the question say if you used crypto for any goods or services. I guess they could just prove I bought it? But not that I used it? Does anyone report this in their taxes?

 

[BroScientist]

We fucked bros. I'm not buying any more bitcoin once my shit is gone. I may actually just burn the key and be done with it. This is worse than transacting with cash.

Frequently Asked Questions on Virtual Currency Transactions | Internal Revenue Service

 

[MindlessWork]

We fucked bros. I'm not buying any more bitcoin once my shit is gone. I may actually just burn the key and be done with it. This is worse than transacting with cash.

Frequently Asked Questions on Virtual Currency Transactions | Internal Revenue Service

I got just $35 in my blockchain so may give it up as well. Hope the IRS or the Feds don't go tracing my transactions...

 

[MisterSuperGod]

I got just $35 in my blockchain so may give it up as well. Hope the IRS or the Feds don't go tracing my transactions...

i'm sure they'd be appalled in knowing you bought a stinking pack of Clomid with it.

You're looking at hard time for that one. Better leave the state and change your name.

 

[Dax]

All of the info on the question say if you used crypto for any goods or services. I guess they could just prove I bought it? But not that I used it? Does anyone report this in their taxes?

My account shows when I used my bitcoin to buy which is one thing they want to know because if used it when it was at a gain you have profited from it ie Uncle Sam wants his cut you have to pay your taxes on any profit (middle class )unless your a millionaire and you have set up shell companies then that is accepted, I encourage everyone to watch "The Laundrymat" on Netflix it will make you sick

 

[BroScientist]

Well, all they have on me is when I sent it to the mixer. Mind you, am pretty sure I have lost on every BTC transaction when you factor in txn fees, except for one. So it's not like I'm hiding income.

That said, I'm sure they would be assholes and ask for receipts for my black market transactions, and I already burned those wallets.