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Thread: Tax-Free Crypto Trading in U.S. to End Under GOP Plan

  1. #1

    Default Tax-Free Crypto Trading in U.S. to End Under GOP Plan

    Tax-Free Bitcoin-to-Ether Trading in U.S. to End Under GOP Plan
    https://www.bloomberg.com/news/artic...under-gop-plan
    Investors in bitcoin and other virtual currencies would lose a lucrative tax break under the Republican tax bill that’s on its way to President Donald Trump’s desk.

    New limits in the bill would bar cryptocurrency owners from deferring capital gains taxes when trading one type of virtual currency for another -- effectively closing a gray area in the tax code, experts say.
    ...
    For investors who hold the virtual currencies, “the bill is bad news,” said Kelsey Lemaster, a tax attorney with Goodwin Procter LLP. “Every time you trade one digital currency for another, one token for another, it’s going to be a taxable event.”
    ...
    Under current law, such trades have been protected under a provision that allows investors to defer capital gains taxes on so-called “like-kind exchanges” -- trades that traditionally have been staples for investors in real estate, art, racehorses and aircraft. The deferral applies when owners of such property swap it for other property of a similar kind, typically within a 180-day period.



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  3. #2

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    Not sure if I trust the source, but this might be a good way to bankrupt the IRS.. or it could lead to abolishing the capital gains tax altogether..

    I mean, they aren't saying that people have to pay more money in taxes on crypto trading, it is just changing when they have to recognize those gains, making things vastly more complex.
    Last edited by dannno; 12-21-2017 at 05:48 PM.
    "He's talkin' to his gut like it's a person!!" -me
    "dumpster diving isn't professional." - angelatc


    "Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

    "Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."

  4. #3

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    Quote Originally Posted by dannno View Post
    Not sure if I trust the source, but this might be a good way to bankrupt the IRS.. or it could lead to abolishing the capital gains tax altogether..

    I mean, they aren't saying that people have to pay more money in taxes on crypto trading, it is just changing when they have to recognize those gains, making things vastly more complex.
    No trust in Bloomberg? Trading between currencies was tax free and a significant portion of trading volume so it would be a huge windfall for the IRS-Fed to tax every transfer, bastards.

    It is a good way to crash the crypto markets. They are all down double digits with Bitcoin dropping 3k today, down to mid 13k just a little while ago. Unless something else just happened I suspect this news might be responsible for crashing the crypto markets tonight.

  5. #4

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    Quote Originally Posted by kahless View Post
    Unless something else just happened I suspect this news might be responsible for crashing the crypto markets tonight.
    Has zero to do with it. There have been tons of news pieces like countries banning or regulating and it didn't affect price.

    The market was insanely overbought. Overbought markets pullback. From the 17th. (Only posting this because occasionally I get it right.)

    Quote Originally Posted by Krugminator2 View Post
    A lot of people just puked their positions out. Price probably rebounds at least $800. But people have a good reason to start thinking about selling. All the people waiting for 20k fell just short and will start exiting. Price took out yesterdays lows after the third push up. Prices are super overextended from key moving averages. A lot is set up from this to at least be a down week and a trek down to at least 16k, If price closes strong today and has an up day tomorrow, I give up.

  6. #5

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    Quote Originally Posted by kahless View Post
    a huge windfall for the IRS-Fed to tax every transfer, bastards.
    If you turn fiat into various crypto and make ten trades in different exchanges and then cash out you would pay the same taxes as if you turn your fiat into one crypto at one exchange, make the same profit and then cash out and do the whole thing in two transactions. The difference is that you have to recognize the profit (or loss) after each trade based on fair market value and ensure you pay the tax in the correct tax year essentially. That's according to bloomberg's interpretation of whatever, I still dunno if it is actually true.
    Last edited by dannno; 12-21-2017 at 10:51 PM.
    "He's talkin' to his gut like it's a person!!" -me
    "dumpster diving isn't professional." - angelatc


    "Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

    "Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."

  7. #6

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    What a nightmare.

    If this is the proper interpretation then I forsee bittrex and any other exchange hosted in the US, losing all US Customers.
    “…let us teach them that all who draw breath are of equal worth, and that those who seek to press heel upon the throat of liberty, will fall to the cry of FREEDOM!!!” – Spartacus, War of the Damned

    BTC: 1AFbCLYU3G1dkbsSJnk3spWeEwpqYVC2Pq

  8. #7

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    Bloodbath, $12,770 and dropping.

  9. #8

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    Quote Originally Posted by kahless View Post
    Bloodbath, $12,770 and dropping.
    $13,500, it got down to somewhere around 12,800 for a very brief time..

    Bitcoin.com is owned by the bitcoin cash people and they just put out a "bitcoin is dead" piece.. lol.. they bought bitcoin.com and put out a bitcoin is dead hit piece.. You can't make this stuff up.

    Bitcoin Crashes! Bitcoin’s Dead! Bitcoin’s Over! A Brief History

    https://news.bitcoin.com/bitcoin-cra...brief-history/


    Sounds like we might see some good buying opportunities in the short term future.
    Last edited by dannno; 12-22-2017 at 01:57 AM.
    "He's talkin' to his gut like it's a person!!" -me
    "dumpster diving isn't professional." - angelatc


    "Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

    "Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."

  10. #9

    Default New Tax Law Closes Bitcoin Loophole (Fortune)

    http://fortune.com/2017/12/21/bitcoin-tax/

    Uncle Sam wants his share of bitcoin profits.
    Bitcoin has defied financial gravity in 2017 but, in one respect, it’s just like any other investment: Uncle Sam expects a cut of the profits when you sell it. And starting in 2018 it will get a little harder to avoid paying up.

    That’s because the major tax reform passed in Congress this week contains a tweak that eliminates an exemption for many “like kind exchanges,” which lets people swap an asset for a similar one without triggering a tax obligation.

    Until now, some investors have relied on the law to exchange one digital currency for another without paying taxes. For instance, someone who owned Bitcoin could diversify their holdings into Ethereum or Litecoin, and plausibly tell the IRS it created no tax obligations.

    As Suzanne Walsh, a partner at the law firm Murtha Cullina, explained to Fortune, this is no longer the case because of a tweak to definition of property eligible for the exemption:

    The tax act in Sec. 13303 amends IRC Section 1031 (a)(1) to delete “property” and replace it with “real property” … So, you can see that now I can no longer take the position that my Bitcoin to Litecoin exchange was a like kind one under Sec. 1031, and I have to recognize the gain when I do it.
    Walsh added that the “in kind” exemption can now only apply to real estate transactions, effectively closing a loophole that has been open to other sort of property transaction such as those involving Bitcoin.



    Digital currency owners are currently obliged to pay taxes when they exchange it for dollars or physical goods, but the new rule now effectively means all crypto transactions are a taxable event.

    This doesn’t mean, of course, that everyone will heed the rule, especially as an IRS investigation revealed that only 802 customers of Coinbase, a popular digital currency exchange, filed a 8949 form related to Bitcoin-related activity in 2015.

    For law-abiding investors, however, the process of reporting digital currency profits—which are taxed as ordinary income in the short term and as capital gains in the long term—will be arduous since Bitcoin exchanges have yet to provide customers with a 1099 form. These forms, which are used by brokerage firms like Fidelity, provide a summary of investment income and are given both to customers and the IRS.

    Meanwhile, the tax headaches for digital currency investors are only going to increase as they must figure out how to account for spin-off currencies like Bitcoin Cash, and as the IRS deploys special software to identify Bitcoin tax cheats. While elected officials like Rep. Jared Polis (D-Co.) proposed an amendment to lighten the reporting requirements for digital currency, the measure did not get included in the final bill.

    President Trump is expected to sign the major tax overhaul, which passed both houses of Congress this week, in the next few days.

  11. #10

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    Japan will take the crypto pie

    Crypto is a security in the US (idiotic). Bitcoin is legal tender in Japan. (smart)

  12. #11

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    HODL strong.

    kill the beast.

    Japan got it right.

    if anything, its bad for alts.. Bitcoin trading as HODLers not affected.

  13. #12

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    I can only see this as a push by the banks and government to kill their competition. It's not about the IRS and taxes, it's all about central control. Or at least control by the old hegemony.
    “…let us teach them that all who draw breath are of equal worth, and that those who seek to press heel upon the throat of liberty, will fall to the cry of FREEDOM!!!” – Spartacus, War of the Damned

    BTC: 1AFbCLYU3G1dkbsSJnk3spWeEwpqYVC2Pq

  14. #13

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    The government can never control BTC.

  15. #14

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    Quote Originally Posted by Schifference View Post
    The government can never control BTC.
    Probably not but it can make dealing with it a super major headache (as if it's not already) and incentivize/promote whatever crypto the bankers support instead, like fully establishment supported Ripple XRP. Looks to me like Ripple is the formal test-bed for the banker 'Fedcoin'.
    "Let it not be said that we did nothing." - Ron Paul

    The entire internet is the domain of paid shills and bots. If you don't know this by now....

    Israel, under control of the Crown and, ultimately, the Vatican, own the USA. If you don't know this by now....

    Talk to people about liberty. You won't find it on websites, you won't find it in politicians.

    Visiting the Outer Banks of NC?
    Outer Banks Fishing Boat Rentals

  16. #15

    Default

    The only way to avoid taxable events is to not engage in any FRN based transactions using their banking system. If you're buying in with their monopoly money then all subsequent actions fall under their jurisdiction. As this development demonstrates, they'll just change the language to apply any new technologies to this standard.
    "Let it not be said that we did nothing." - Ron Paul

    The entire internet is the domain of paid shills and bots. If you don't know this by now....

    Israel, under control of the Crown and, ultimately, the Vatican, own the USA. If you don't know this by now....

    Talk to people about liberty. You won't find it on websites, you won't find it in politicians.

    Visiting the Outer Banks of NC?
    Outer Banks Fishing Boat Rentals

  17. #16

    Default

    Quote Originally Posted by devil21 View Post
    Probably not but it can make dealing with it a super major headache (as if it's not already) and incentivize/promote whatever crypto the bankers support instead, like fully establishment supported Ripple XRP. Looks to me like Ripple is the formal test-bed for the banker 'Fedcoin'.
    the first decent comment you make. the rest is garbage.

  18. #17

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    Quote Originally Posted by Mordan View Post
    the first decent comment you make. the rest is garbage.
    Here's the thing. In case you haven't noticed I'm a lot more familiar with blockchain than you probably realize. What I am not is a fan boi for the current pump and dump ponzi that is ongoing nor do I ever hand over money to unaccountable foreign entities that can, do and will shut out my access whenever the ponzi is threatened with collapse. I'd also give you more leeway if not for the fact that you only post on RPF to urge people to do just that.
    Last edited by devil21; 12-22-2017 at 11:24 PM.
    "Let it not be said that we did nothing." - Ron Paul

    The entire internet is the domain of paid shills and bots. If you don't know this by now....

    Israel, under control of the Crown and, ultimately, the Vatican, own the USA. If you don't know this by now....

    Talk to people about liberty. You won't find it on websites, you won't find it in politicians.

    Visiting the Outer Banks of NC?
    Outer Banks Fishing Boat Rentals

  19. #18

  20. #19

    Default

    Quote Originally Posted by devil21 View Post
    Here's the thing. In case you haven't noticed I'm a lot more familiar with blockchain than you probably realize. What I am not is a fan boi for the current pump and dump ponzi that is ongoing nor do I ever hand over money to unaccountable foreign entities that can, do and will shut out my access whenever the ponzi is threatened with collapse. I'd also give you more leeway if not for the fact that you only post on RPF to urge people to do just that.






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