Hello all,
I have been trying to do some research on this for the past few days however between work and life I have very little time to dedicate towards gaining a concrete understanding. I am hoping one of you amazing people could enlighten me on this matter.
As I understand it, capital gains tax applies when you sell your coins as you have realized those gains and it becomes an income source that must be reported and payed appropriately in accordance with your local tax laws. My question is, if an individual uses their BTC to buy goods or services is that seen as a realized gain prior to the purchase of said product?
I apologize if this topic is tiresome or repetitive to the forum savvy, but feel free to ELI5 or if you have the time I welcome links to resources that I may do my own research and save you the energy.
Thanks in advance!
If I consider my country's law, I will have to pay capital gains tax on the scenario you have given. The price that you pay to buy the products or services minus your investment amount, will be considered as your capital gain.
I am not sure which country you live in, but I will have to pay capital gains tax in my country as per the local law.
Otherwise you can imagine the amount of products and services will be purchased by people to avoid capital gains tax! Simply doesn't make sense to the government.