Will the IRS (US Tax Code) kill Cryotpo (DASH)

E

EinsteinTX

New member
Hi everyone. This topic may have been covered to death, but so far I see everyone ignoring it, pretending it's not a problem. The IRS rules clealrly state that any time you sell/exchange a crypto currency for another (or for FIAT), you have to fill out taxes just like with a stock or bond sale in your Fidelity account with MSFT or IBM stock. According to those rules, every time you buy a cup of coffee with DASH, every time you pay for your monthly web membership, every time you exchange DASH for cash or vise versa, you have another tax form to fill out. Not even just a form to fill out, but you could owe huge taxes if based on the current price of DASH. I'm scared to touch my DASH as I'll be hit with a big tax bill next year. If this rule isn't changed, I don't see how crypt can become mainstream. The long crypto addresses are nothing of a hassle compared to the tax burden associated with it. Is everyone just pretending this isn't the case? Is everyone just not going to do it and possibly get a nasty fine from the IRS? Is there a general faith that the rules will be changed? Am I the only one worried about this? If this isn't changed, I think crypto (DASH) is possibly dead in its tracks.
 
You are absolutely right, it will, and it has... Most people don't like to break the law, and the tax code makes it too cumbersome to make day to day transactions. Crypto currency WILL go mainstream though, it will just take time... and it will likely be that the US is the LAST to follow suit. Japan and Sweden are already accepting crypto as a currency, and I'm sure there will be others soon to follow. What it means for us is we just need to spend our marketing dollars on countries that are more crypto friendly... Remember, it doesn't have to become mainstream in the US for it to become mainstream in the rest of the world... and once it becomes mainstream in the rest of the world, it is inevitable that the US will update it's laws and it will become mainstream in the US.

There are probably other countries I'm not aware of that are more crypto friendly... Anybody know what I'm missing?
 
EinsteinTX said:
The IRS rules clealrly state
Click to expand...

It would help the discussion if you included links to cite your source.

I found this:

https://www.irs.gov/uac/newsroom/irs-virtual-currency-guidance

and specifically this:

General tax principles that apply to property transactions apply to transactions using virtual currency.
Click to expand...

and this:

  • The character of gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in the hands of the taxpayer.
  • A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property.
Click to expand...

Having zero expertise with regard to tax law, I would interpret this to mean that the IRS treats virtual currency like barter goods.

This seems to be a key question to answer: what does it mean, "depends on whether the virtual currency is a capital asset".

Here's a definition I found:

https://www.law.cornell.edu/uscode/text/26/1221

which starts us down a rabbit hole.

My key takeaway:

If you are dealing with cryptocurrency in small amounts, don't worry about the IRS. If you are dealing in large amounts, consult your tax advisor.

Also use private send and mix your coins.
 
jimbursch said:
If you are dealing with cryptocurrency in small amounts, don't worry about the IRS.
Click to expand...
Take this advise at your own risk. The IRS treats mined crypto as income. It treats crypto that you buy and sell as a commodity which is treated exactly the same way as stocks as far as IRS reporting... Wash sales and all.

So an example is if you mine 10 Dash at $100 each you would report $1000 as income.

Since you now own the Dash, you will record the mine date as the purchase date (like a stock). So you will have to report again when you sell the Dash. So for instance if you sold the 10 Dash later for $1200, you would also have a $200 capital gain... It would be a long term capital gain if you held it for more than a year.

And no I'm not going to go look up the tax code and provide links... this is something everyone should familiarize themselves with if they own crypto. If you are living in the US and not reporting mining income, and capital gains/losses for trading on your taxes then you are breaking the law.
 
You must log in or register to reply here.
Back
Top