I am just trying to get some clarification on the new tax laws in the USA. It is obviously a blow to traders which I am.
I know coin to coin is a taxable transaction now. For instance, I buy Eth off of Coinbase and then I send it to Bittrex to buy ADA.
So my question is,
Am I getting taxed for purchasing ETH with fiat from Coinbase also?
Also, I noticed people are saying that only the gains from Crypto to Crypto are taxed, so if I bought $100 worth of ETH and sent it to Bittrex, traded that ETH for $100 worth of ADA, there is no gain. Still taxable?
And if I am getting taxed for exchanging Crypto to Crypto, does anybody know the "exact percentage" traders are getting taxed? I have seen 15%-25%
Thanks.
I think a lot of people are inventing regulations and thinking that the tax code mandates it. The new tax code just made it clear that 1031 transactions only apply to real estate. But 1031 never applied to cryptocurrency in the first place. There is a a form that has to be filled out for each 1031 transaction. Obviously one cannot fill out thousands of these forms if they have thousands of trades. But practically aside (since the 1031 was invented before cryptocurrency), it would be strange, using the language on those forms, to think it could be applied to cryptocurrency. All the new tax code did was to make this explicit.
Many persons seem to be assuming that all trades of cryptocurrency to cryptocurrency is taxable. It does not state this anywhere in the tax code. In fact, the only guidance we have is from the IRS in 2014 and it very clearly uses the term "virtual currency". It mentions that exchange of virtual currency for "other property" is taxable. It never mentions exchanges of "virtual currency" to "virtual currency". So I would assume (and there is no reason to assume otherwise without further guidance from the IRS) that taxation occurs when exchanging virtual currency for other property (ie non-virtual currency), which would include commodities, real estate, USD, and physical property, to name a few.
If you receive BTC, it is taxable as income at the cost basis when you received it. Otherwise during exchanges it should be taxed as a short-term or long-term capital gain. The following videos are spreading misinformation:
https://www.youtube.com/watch?v=q5VCq3pX3yshttps://www.youtube.com/watch?v=x_qsf2cQvoYEg, in the 2nd video he says that buying BTC from USD is taxable. That is simply false. The cost basis is the same at that point. If in the future the value was exactly the same and it were exchanged, then there is no difference in value and no tax.