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Re: CoinTracking - Profit/Loss Portfolio and Tax Reporting for Digital Currencies
by
LJF007
on 04/12/2017, 15:01:25 UTC
Seems like when I incur a fee to simply move crypto from exchange to wallet, I am purchasing a service at that moment and so performing a taxable Spend at that moment for just that fee amount.

It doesn't look like a gain, more like a loss.

Does anybody know more?


I should have explained better... by "a taxable Spend" I mean "a tax-impactable spending event CT refers to as a Spend type".   

A service fee is purchased (incurred) with crypto simply to move the larger crypto balance.  Seems to me like the fee part is a tax-impactable event...  a Spend in this case, so FIFO (or other method) capital gain/loss calculation takes place and that result goes to one's capital gain/loss tax reporting.

But then also... what was the Spend (or any Spend) used for?  That is, was it a tax deductable purpose or not?  If I buy a cup of coffee... no (unless it's a business entertainment expense!).  But in this situation, if I am buying a service (=incurring a fee) to move my crypto from the exchange to my preferred secure wallet... I'd say yes, the fee is also a deductible expense.  That fee expense reduces one's current taxable income and would appear as a deduction on tax reporting.

If this seems to end up being correct, I understand it isn't likely a huge priority.  CT is a great help to me... Thank You!  In an ideal world, I suppose one way to take care of this is to have the Withdrawal type address this common fee situation.  It would treat the fee portion only in the same manner as a "Spend".  It would also carry the fee value over to a tax expense report (maybe "Tax Deductible Fee Report"?). 

Or perhaps create another Withdrawal type that works like this so people are not suddenly impacted by this when they don't want to be until they choose to be.
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Re: CoinTracking - Profit/Loss Portfolio and Tax Reporting for Digital Currencies
by
LJF007
on 03/12/2017, 19:33:37 UTC
Hello,

New Pro user here.  This subject was kind of touched upon in earlier posts, but I didn't find an answer so please bear with me:

As we know, a common situation is moving crypto from one place to another... a non-taxable Withdrawal and non-taxable Deposit (not a taxable Trade and not a taxable Spend). 

Also common is that a fee for that service is also incurred upon Withdrawal (say from an exchange when moving a crypto balance to a wallet).  The send amount is gross in CT, the fee amount is noted properly in CT, and the subsequent Deposit amount is less (net) in CT.  All that is correct.

But unlike the effective inclusion of fees in CT taxable events of Trade and Spend, I have yet to see how that service fee "spending" is to be carried over to the tax reporting side of CT.  I see the incurred capital gains reporting (for Trades and Spends).  I see the income reporting (mining and general income).  On the expense side, I see areas for inclusion of certain other costs.

Seems like when I incur a fee to simply move crypto from exchange to wallet, I am purchasing a service at that moment and so performing a taxable Spend at that moment for just that fee amount.  Subject to the FIFO (or other) taxable sale treatment as any other Spend.  Small as it is.  The movement of the net crypto amount (after that service fee) is certainly a non-taxable event.  But I have not figured out if CT has an automated mechanism for me to include the movement fee "Spend" as a taxable event in the tax reports... or if I am just not understanding something about this. 

After gain/loss tax treatment (if I'm right that is), seems it is ALSO then a tax expense deduction?  Being a cost to move the crypto around?

Thanks in advance for your thoughts!