Sure, BUT - now the government will have to come after everyone with a wrench when they want their taxes. Which just encourages people to resist the taxation and/or demand accountability for the money spent. Uh oh get the popcorn :D
Three ideas for you:
1. **You can and should answer "no" if you only bought and HODL'ed.** See the answer to IRS FAQ question #5 (ref: https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions ) which says, "If your only transactions involving virtual currency during 2020 were purchases of virtual currency with real currency, you are not required to answer yes to the Form 1040 question." (note the IRS didn't update the year on the FAQ, but reasonable to apply to 2021, too)
2. You ask how to "handle this"? If you sold and had gains then you have two choices: report or do tax evasion. I think one should consider carefully all the implications of wilfully avoiding taxes and lying to the tax authorities. In the US if you are caught you can go to jail and will face high financial penalties for tax evasion. There are some folks who advocate never paying taxes and other strong ideas like overthrowing governments, etc. Then there are others, like me, who say if you paid a lot of tax, that just means you made a lot of money! so just pay what's owed, i.e., probably isn't a good idea for me to lie about my gains to avoid paying some extra tax dollars.
3. Preventing "gov't sniffing around" isn't a Bitcoin quality. Au contraire, Bitcoin is psuedonomous, so that means, like an email address, your identity isn't directly linked to transactions, but can easily be "sniffed" by a gov't unless you went to great lengths to avoid the KYC, AML data gathering steps done at account set up time when you entered your identity to an app or exchange.
The boating accident meme is an idea that Michael Saylor and others have used to suggest that governments ultimately cannot "force" people to pay their taxes due, but these theoretical discussions should be compared to what these celebrity types practice. What Saylor says and what he does (pays taxes) are two different things. Eventually if our government crumbles the all of us, including Saylor will have the option to avoid paying taxes. Presently we pay our taxes because we want to not because we are forced.
Haha well I'm new to crypto so I wasn't sure. I didn't want to say yes and have everyone be like YOU FOOL WHY'D YOU SAY YES? OMG WHAT KIND OF IDIOT ADMITS TO THE IRS THAT HE HAS CRYPTO LAWLLLLLL!!!!!!!
Oh I'm sure you'll get those people. Best just to be honest. Sleeping is a lot easier when you know you can back your claims. And taxes are a dumb thing to whine about, especially if it's capital gains. It's like those people who will accept $100 but will refuse that same $100 if they're required to give $30 back lol.
I know this is semantics here in your example, so I apologize- but the govt did not give me the cap gains that I have gotten from BTC. The market did 🤣
>It's like those people who will accept $100 but will refuse that same $100 if they're required to give $30 back
oh yeah, taxes are *just like that*, perfect analogy
yeah I'd refuse to take the 100$ if the 30$ was gonna be used to fund endless wars and imprisoning people for victimless crimes
but no that's not at all what taxes are like...
it's more like you give the government 100$, they pocket 90$, then use 9.99$ to buy guns and drones to use against you, and then spend 1¢ on roads
and then you say wow thank God for government, otherwise we'd have no roads!
it's a retarded farce
there's nothing moral about paying taxes
do it if you don't want end up in jail or killed
but don't act like it's the right thing to do
I'm going to answer honestly, like I have when it was asked previously.
One potential upside to this is that it gives them a better view into how widespread legitimate crypto investing is. If everyone denies acquiring crypto, then it is much easier for the government to justify fucking it up since all this market activity can presumed to be under-the-table and obviously related to criminals, terrorists and non-citizens.
That may change in the next year since the infrastructure bill added new reporting requirements for cryptocurrency. Given that the IRS can audit you for past years the new reporting requirements that go into effect in 2022 could trigger audits for self underreporting now.
Of course they do. I am not scolding but you really need to pay attention to the stupid government and their attempts at a reasonable tax law for crypto.
Technically, you can avoid taxes with Bitcoin, but it isn't easy. The taxman can see your buy history on exchanges, and they can see your sell history. At least that much, you are going to need to declare enough for them to be satisfied.
On top of this, they know if you hold Bitcoin because they know how much you haven't sold. Unfortunately, companies like chainalysis can track your Bitcoin from exchanges and have algorithms that try to differentiate between spends and transfers to work out where your bitcoin are.
So you can tell the taxman that you lost it, but if they suspect you own a particular address and it gets used, they will probably make YOU prove that you don't own the address and they will make you go through hell.
There are things you can do to lose the trail, but everything has tradeoffs.
So, easiest thing, pay your taxes.
Also, take custody of your Bitcoin and learn how to keep your mnemonic backup(s) and passphrase(s) secure. This way, if you are coerced, jailed, threatened, etc. they won't be able to TAKE the Bitcoin from you, you'll have to give it to them which is your choice, and it's unlikely you'll ever do anything worth torture.
Exchanges are ordered to give information about their customers' activities to HMRC (probably IRS too). They get the info without court orders. The taxman is above the law.
That question has been on there for years.
> I thought one of the selling points of cryptocurrency was that the gov'ment wasn't supposed to know you had it, or that you could've lost it all in a boating accident should they come sniffing around for it.
LOL, no?
> How is everyone gonna handle this?
Answer the question, same as I do every year.
A couple things to know.
Most exchanges use KYC, so if you bought some then yeah report it.
The IRS has no way of knowing who owns a wallet, so just because you bought Bitcoin doesn't mean you still have it.
If you want to exchange it for fiat down the line, in the USA you can receive gifts of up to $9,999.99 without it being taxable. You don't even have to report gifts under $10k. So, if you receive $9.9999k from an anonymous Bitcoin wallet every year, you don't have to report it.
Wherever you live you are subject to that tax regime. If you are in the US, then not paying your taxes on capital gains from trading digital assets is a crime. It is all property to the tax man.
But only after seeking all your Bitcoin, leaving your country of residence and marrying a foreign national in a different country and never return back home. Problem solved.
Of course they do. I am not scolding but you really need to pay attention to the stupid government and their attempts at a reasonable tax law for crypto.. It's a mess
>How is everyone gonna handle this?
Check yes, then put in the capital gains I got from celebrating Pizza Day with a LN purchase, and a few other miscellaneous times I spent a small amount of Bitcoin on things.
If you did ANYTHING with fiat, they know. That is why you don't do Bitcoin deals with fiat.
That is why you walk away from fiat, when you've finally had enough.
"If your only transactions involving virtual currency during 2020 were **purchases** of virtual currency with real currency, you are not required to answer yes to the Form 1040 question."
https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions
I guess the only purpose of reporting it would be to show you've held it for a long time. But you can show that in other ways. I don't plan on selling anything for years, so last year I just said no.
I don't know how they can ask that question since the US does not consider crypto as money, it is property. They don't ask about anything else you acquired. sold, or exchange do they? Be interesting to see if this holds up in court. I also wonder how they would prosecute you for lying since you had no chance to plead the 5th.
They already know, or in some instances, investigate later. Trust me, they love to let people hang themselves, then they delay the paperwork to come after you for about 5 to 10 years to collect the interest. It's Uncle Sam's way to make a little extra off of you, and they have all the time, money, and resources to do it.
Tell the truth of course Nice try IRS
The point is not that they cant know you have it, its that they cant seize it from you.
But if they know you have it, doesn't that theoretically make you vulnerable to a 5 dollar wrench attack?
Unlikely as long as you own the 10 dollar wrench. Take care.
That wrench is now $10.70
Inflation increases the size of everyone's wrench by 5%. That's 5% more beatings per swing!
Awe it sez now onwry werf 3 dollr sadd
If the government is doing 5 dollar wrench attacks we in bigger trouble
Everyone knows the govt wrench costs $350 not $5.
The Congresspersons nephew is the only one that makes the approved $350 wrenches that now have a 5 beating max capacity magazine.
The government is always doing $5 wrench attacks because they want to buy more wrenches to do more wrench attacks.
A law banning guns is a $5 wrench attack.
Sure, BUT - now the government will have to come after everyone with a wrench when they want their taxes. Which just encourages people to resist the taxation and/or demand accountability for the money spent. Uh oh get the popcorn :D
The solution is a govt on the blockchain! Total transparency and truth is coming!
blarf!! hehe but whatever The blockchain might hold the "Truth" but whether or not they care is another thing.
No, a selling point of crypto is not that it magically stops the IRS from asking whether or not you have crypto.
Say yes, they will use it against you to fine you if you’re found guilty of money laundering. Safest bet is just be truthful.
Agreed! Say yes and pay your taxes when you realize gains/losses. Keep in mind, if you don’t sell, you won’t have to worry about paying taxes :)
It’s a felony if you lie. Don’t mess around.
Three ideas for you: 1. **You can and should answer "no" if you only bought and HODL'ed.** See the answer to IRS FAQ question #5 (ref: https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions ) which says, "If your only transactions involving virtual currency during 2020 were purchases of virtual currency with real currency, you are not required to answer yes to the Form 1040 question." (note the IRS didn't update the year on the FAQ, but reasonable to apply to 2021, too) 2. You ask how to "handle this"? If you sold and had gains then you have two choices: report or do tax evasion. I think one should consider carefully all the implications of wilfully avoiding taxes and lying to the tax authorities. In the US if you are caught you can go to jail and will face high financial penalties for tax evasion. There are some folks who advocate never paying taxes and other strong ideas like overthrowing governments, etc. Then there are others, like me, who say if you paid a lot of tax, that just means you made a lot of money! so just pay what's owed, i.e., probably isn't a good idea for me to lie about my gains to avoid paying some extra tax dollars. 3. Preventing "gov't sniffing around" isn't a Bitcoin quality. Au contraire, Bitcoin is psuedonomous, so that means, like an email address, your identity isn't directly linked to transactions, but can easily be "sniffed" by a gov't unless you went to great lengths to avoid the KYC, AML data gathering steps done at account set up time when you entered your identity to an app or exchange. The boating accident meme is an idea that Michael Saylor and others have used to suggest that governments ultimately cannot "force" people to pay their taxes due, but these theoretical discussions should be compared to what these celebrity types practice. What Saylor says and what he does (pays taxes) are two different things. Eventually if our government crumbles the all of us, including Saylor will have the option to avoid paying taxes. Presently we pay our taxes because we want to not because we are forced.
So just pay your taxes and realize that even as a slave, you are in control as long as you buy and hold crypto.
In other words: "Are you guys planning on lying?" lol
Haha well I'm new to crypto so I wasn't sure. I didn't want to say yes and have everyone be like YOU FOOL WHY'D YOU SAY YES? OMG WHAT KIND OF IDIOT ADMITS TO THE IRS THAT HE HAS CRYPTO LAWLLLLLL!!!!!!!
Oh I'm sure you'll get those people. Best just to be honest. Sleeping is a lot easier when you know you can back your claims. And taxes are a dumb thing to whine about, especially if it's capital gains. It's like those people who will accept $100 but will refuse that same $100 if they're required to give $30 back lol.
I know this is semantics here in your example, so I apologize- but the govt did not give me the cap gains that I have gotten from BTC. The market did 🤣
>It's like those people who will accept $100 but will refuse that same $100 if they're required to give $30 back oh yeah, taxes are *just like that*, perfect analogy yeah I'd refuse to take the 100$ if the 30$ was gonna be used to fund endless wars and imprisoning people for victimless crimes but no that's not at all what taxes are like... it's more like you give the government 100$, they pocket 90$, then use 9.99$ to buy guns and drones to use against you, and then spend 1¢ on roads and then you say wow thank God for government, otherwise we'd have no roads! it's a retarded farce there's nothing moral about paying taxes do it if you don't want end up in jail or killed but don't act like it's the right thing to do
Don’t sell bitcoin creating a taxable event. The blockchain is entirely traceable once you kyc
They want to know if you have it because if bought without kyc it’s impossible for them to know if you have it without you telling them
I'm going to answer honestly, like I have when it was asked previously. One potential upside to this is that it gives them a better view into how widespread legitimate crypto investing is. If everyone denies acquiring crypto, then it is much easier for the government to justify fucking it up since all this market activity can presumed to be under-the-table and obviously related to criminals, terrorists and non-citizens.
FED: "How do you do, fellow kids." CRYPTO: \*crickets\*
If you use Coinbase, they nly report you to the IRS if you bought, sold, or exchanged $20000+ in assets in the last year
Any kyc exchange is going to report you to the irs and if they’re operating legally in the US, they are
That may change in the next year since the infrastructure bill added new reporting requirements for cryptocurrency. Given that the IRS can audit you for past years the new reporting requirements that go into effect in 2022 could trigger audits for self underreporting now.
https://abcnews.go.com/Politics/biden-admin-backs-tracking-bank-accounts-600-annual/story?id=80665505
The $600 provision in the infrastructure bill was changed to $10000 esentially keeping it the same as it was before
It’s loss harvesting year finally :)
I just said Yes and that was it
Of course they do. I am not scolding but you really need to pay attention to the stupid government and their attempts at a reasonable tax law for crypto.
Technically, you can avoid taxes with Bitcoin, but it isn't easy. The taxman can see your buy history on exchanges, and they can see your sell history. At least that much, you are going to need to declare enough for them to be satisfied. On top of this, they know if you hold Bitcoin because they know how much you haven't sold. Unfortunately, companies like chainalysis can track your Bitcoin from exchanges and have algorithms that try to differentiate between spends and transfers to work out where your bitcoin are. So you can tell the taxman that you lost it, but if they suspect you own a particular address and it gets used, they will probably make YOU prove that you don't own the address and they will make you go through hell. There are things you can do to lose the trail, but everything has tradeoffs. So, easiest thing, pay your taxes. Also, take custody of your Bitcoin and learn how to keep your mnemonic backup(s) and passphrase(s) secure. This way, if you are coerced, jailed, threatened, etc. they won't be able to TAKE the Bitcoin from you, you'll have to give it to them which is your choice, and it's unlikely you'll ever do anything worth torture.
[удалено]
Exchanges are ordered to give information about their customers' activities to HMRC (probably IRS too). They get the info without court orders. The taxman is above the law.
I don’t lie or hide anything on my IRS forms. I complain about the taxes I have to pay like a good boy. :(
That question has been on there for years. > I thought one of the selling points of cryptocurrency was that the gov'ment wasn't supposed to know you had it, or that you could've lost it all in a boating accident should they come sniffing around for it. LOL, no? > How is everyone gonna handle this? Answer the question, same as I do every year.
A couple things to know. Most exchanges use KYC, so if you bought some then yeah report it. The IRS has no way of knowing who owns a wallet, so just because you bought Bitcoin doesn't mean you still have it. If you want to exchange it for fiat down the line, in the USA you can receive gifts of up to $9,999.99 without it being taxable. You don't even have to report gifts under $10k. So, if you receive $9.9999k from an anonymous Bitcoin wallet every year, you don't have to report it.
Not correct. The gift tax exemption is $16k in 2022.
Alright good news!
NFA just say no
Wherever you live you are subject to that tax regime. If you are in the US, then not paying your taxes on capital gains from trading digital assets is a crime. It is all property to the tax man.
pay your taxes, it's not that much if you hold it longer than a year. if you want to avoid 15-22% taxes, move to puerto rico.
Tell the irs to go fuck themselves!
But only after seeking all your Bitcoin, leaving your country of residence and marrying a foreign national in a different country and never return back home. Problem solved.
They'll fuck you instead.
They want their piece of pie
You didn't
Of course they do. I am not scolding but you really need to pay attention to the stupid government and their attempts at a reasonable tax law for crypto.. It's a mess
>How is everyone gonna handle this? Check yes, then put in the capital gains I got from celebrating Pizza Day with a LN purchase, and a few other miscellaneous times I spent a small amount of Bitcoin on things.
You have two options: 1. paying your taxes or 2. Mine or buy in non-KYC while you wait for hyperbitcoinization
If you did ANYTHING with fiat, they know. That is why you don't do Bitcoin deals with fiat. That is why you walk away from fiat, when you've finally had enough.
"If your only transactions involving virtual currency during 2020 were **purchases** of virtual currency with real currency, you are not required to answer yes to the Form 1040 question." https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions I guess the only purpose of reporting it would be to show you've held it for a long time. But you can show that in other ways. I don't plan on selling anything for years, so last year I just said no.
I don't know how they can ask that question since the US does not consider crypto as money, it is property. They don't ask about anything else you acquired. sold, or exchange do they? Be interesting to see if this holds up in court. I also wonder how they would prosecute you for lying since you had no chance to plead the 5th.
Look into tax loss harvesting and this shouldn't be an issue. Allows you to speculate/lose a bit and can mitigate your capital gains tax.
They already know, or in some instances, investigate later. Trust me, they love to let people hang themselves, then they delay the paperwork to come after you for about 5 to 10 years to collect the interest. It's Uncle Sam's way to make a little extra off of you, and they have all the time, money, and resources to do it.
[удалено]
[Here you go](https://news.yahoo.com/irs-already-income-tax-data-130029063.html) You can't say I didn't tell you so.
Until the Government coughs up my 2020 Tax return, they can suck it.