4 upvotes, 2 direct replies (showing 2)
View submission: Don't invest recklessly
In reality, crypto investors should be taxed every time they exchange bitcoins for altcoins as well.
Comment by sophos-mckenna at 30/11/2017 at 23:27 UTC
7 upvotes, 2 direct replies
Is this not the case already???
Previous tax law has already ruled that you must pay capital gains tax on the fair market value, if applicable, when you barter swap a gold coin for a silver coin. The IRS is going to gratuitously ass rape any crypto traders that have been doing this and not paying capital gains tax because crypto to crypto trades are not “like kind”. They already have their hands in the coinbase cookie jar and will make very public examples out of some big time traders before too long. This is why the long term buy and hold strategy is good in this area.
Bottom line is if you are making capital gains on any crypto to crypto trades it would be highly prudent to report them and err on the side of paying more tax than you should. Otherwise spend your money now on an industrial size container of butthole vaseline.
Comment by cherrypowdah at 30/11/2017 at 20:12 UTC
4 upvotes, 1 direct replies
That's the whole point of having them on an exchange, though. The exchange owns all currency deposited to it and hands out IOU's in return, if they actually sent btc to different wallets every time someone makes a trade, the transaction fees would kill trading.