Tax on Bitcoin Profits

Jose Maria

I know a few lads making a few quid from company bonus shares, they get the money paid into their credit union accounts and avoid capital gains tax

CIARAN_BOYLE

teticuk wrote: »

Where lack of accounting and/or accumulation of the coins is not very clear, would it be considered acceptable to just pay the 33% on disposal to Euro?

The acquisition cost would have been negligible anyway in some cases where coins were bought for cents.
I would assume many people got in when they didn't really know if it was necessary to track at the time and because it was so cheap they were not concerned

No it would not be considered acceptable. There may have been multiple events where cgt should have been paid over a number of years and revenue will seek interest and penalties on the cgt that should have been paid. They can also can also levy specific penalties on a failure to make a return and a failure to keep appropriate records.

That said if you pay 33% it is less likely that you will come up on Revenues program for catching persons who hard too wealthy for their level of income.

Jose Maria wrote: »

I know a few lads making a few quid from company bonus shares, they get the money paid into their credit union accounts and avoid capital gains tax

Of course and tax fraud is easy to get away with in this country. Doesnt mean it's right or that you will get away with it for ever. Credit unions of course have money laundering legislation and are required to support suspicious transactions.

Shauny2010

CIARAN_BOYLE wrote: »

Of course and tax fraud is easy to get away with in this country. Doesnt mean it's right or that you will get away with it for ever. Credit unions of course have money laundering legislation and are required to support suspicious transactions.

Does funding an exchange like kraken or Coinbase now flag as suspisious transactions for revenue?

barneystinson

Jose Maria wrote: »

I know a few lads making a few quid from company bonus shares, they get the money paid into their credit union accounts and avoid capital gains tax

What do you mean by company bonus shares?
Share options?

ZeroThreat

Shauny2010 wrote: »

Does funding an exchange like kraken or Coinbase now flag as suspisious transactions for revenue?

They may just send legal documents to all the major worldwide exchanges demanding details of all Irish people registered with accounts, and once those are obtained, cross check them against all the banking logs.

Peregrinus

ZeroThreat wrote: »

Sometimes it seems to me that Ireland seems to be designed around a concept to create enough redtape, regulations, arcane rules and complications to keep the Legal & Accounting/Banking professions in their multi-million leafy victorian mansions & prestige cars

I have to say that for your regular joe who is an employee and has modest investment income from conventional investments, tax administration in Ireland is vastly simpler, and his compliance obligations much lighter, than in most other countries. The Irish Revenue Commissioners are exemplars of efficiency, and are studied as such by the revenue authorities of other countries.

bobbyg

Sorry if this has been asked in the thread I got to page 15 and didn't see it, are there are CGT implication if you use bitcoin to gamble?

ZeroThreat

bobbyg wrote: »

Sorry if this has been asked in the thread I got to page 15 and didn't see it, are there are CGT implication if you use bitcoin to gamble?

I guess the change in value between the time you buy them and the time you move them to the gambling site is taxable.

bobbyg

ZeroThreat wrote: »

I guess the change in value between the time you buy them and the time you move them to the gambling site is taxable.

Thanks but what if you move them immediately to the gambling site before any change in value?

realitykeeper

Peregrinus wrote: »

It's completely different. Subdividing a bitcoin into decimal-fractions-of-bitcoin doesn't the quantity of bitcoin that you hold any more than exchanging a 10-euro note for ten 1-euro coins would increase the quantity of euro that you hold. Whereas issuing new fiat currency does in fact increase the aggregate volume of fiat currency in existence.

Not if the central banks get in on the act. They have governments behind them to make up the rules to suit their purposes.

An Ri rua

bobbyg wrote: »

Thanks but what if you move them immediately to the gambling site before any change in value?

Capital GAINS Tax. No gain, no tax

ZeroThreat

bobbyg wrote: »

Thanks but what if you move them immediately to the gambling site before any change in value?

An Ri rua wrote: »

Capital GAINS Tax. No gain, no tax

well, according to someone earlier even if the move takes a few mins or seconds, you need to report any fluctuation in price during transfer no matter how small.

Would be interesting to hear from people who have actually made tax returns on crypto.

Seems to me that there's a bunch of accountant types here who obviously hate non-fiat currency and love restating how nuanced and complex the rules are (no doubt to discourage investment) , and then the rest seem to libertarian-types trading seemingly without caring about tax.

Anyone here actually filed CG1, form 12, or whatever it is you're supposed to return (in relation to cryptos)?

Tigger

ZeroThreat wrote: »

well, according to someone earlier even if the move takes a few mins or seconds, you need to report any fluctuation in price during transfer no matter how small.

Would be interesting to hear from people who have actually made tax returns on crypto.

Seems to me that there's a bunch of accountant types here who obviously hate non-fiat currency and love restating how nuanced and complex the rules are (no doubt to discourage investment) , and then the rest seem to libertarian-types trading seemingly without caring about tax.

Anyone here actually filed CG1, form 12, or whatever it is you're supposed to return (in relation to cryptos)?

your missing the point
if you never turn the btc to fiat you will never have to pay cgt
if you buy goods and services from me its smthe same as cash if the dont see itvitvdodnt happen
howevevr the issue i and many on here would have is thatvatvsome point (probably soon) any sensible person will cash out and at tgat pointvtgey will be catchable
unless you can sell the btc for cash
so dont move to paraguay just sell your btc forbcash

ZeroThreat

Tigger wrote: »

your missing the point
if you never turn the btc to fiat you will never have to pay cgt
if you buy goods and services from me its smthe same as cash if the dont see itvitvdodnt happen
howevevr the issue i and many on here would have is thatvatvsome point (probably soon) any sensible person will cash out and at tgat pointvtgey will be catchable
unless you can sell the btc for cash
so dont move to paraguay just sell your btc forbcash

Did you not read all the earlier posts on this thread, you don't have to convert to fiat to be liable for CGT, once you convert from one type of crypto to another, chargeable tax immediately applies.

An Ri rua

ZeroThreat wrote: »

well, according to someone earlier even if the move takes a few mins or seconds, you need to report any fluctuation in price during transfer no matter how small.

You're agreeing with me but saying 'well' after countering my point re 'no gain'. If there's a gain,there's a gain. Time has nothing to do with it. if its over €1270, you're liable. Its not complicated.

Accountant types? What does that mean? The whole point of the thread is to discuss the tax position on Bitcoin profits. A gain is a gain. A liability is a liability. A stitch in time saves nine. Loose lips sink ships.

Make of it what you will.

covfefe

Tigger wrote: »

just sell your btc for bcash

I will never sell my Bitcoin for Bcash!!

AndrewJRenko

McCrack wrote: »

Yes and anything/everything else

If the seller accepts payment in btc then it can be used to buy anything the parties wish

Same as fiat money

So what sellers are out there that accept bitcoin for Irish residents? Can I buy my weekly shopping? Can I buy a bike or a new car? How can I buy a meal in a restaurant or a flight to the US?

ZeroThreat wrote: »

I was thinking more of holding long term, wasn't really thinking in terms trading between coins.

Although you have touched on a slight problem, if someone bought, say bitcoin or ethereum on gdax, and then waited, lets say 1 hour for them to arrive on bittrex to buy alts just to hold - during which time the price has changed slightly, given the volatile nature of cryptos, seems a bit extreme to have to pay tax on some fluctuations within the space of minutes.

I could understand taxing crypto to crypto transactions for people trading back & forth.

The exact same issues have been around for decades for share trading, with prices fluctuating by the second and Revenue don't have a problem with taxing those gains fairly.

Peregrinus

Bitcoin and other cryptocurrencies are basically similar to volatile foreign currencies and/or volatile securities. They'll be taxed exactly like volatile foreign currencies and volatile securities.

People who think special tax rules apply to cryptocurrency transactions need to tell us where they think these special rules are coming from.

bobbyg

An Ri rua wrote: »

Capital GAINS Tax. No gain, no tax

Thanks but there may not be a GAIN when you move it to betting site or when you gamble with it but when you then decide to convert your winnings to cash there could be a gain?

An Ri rua

bobbyg wrote: »

Thanks but there may not be a GAIN when you move it to betting site or when you gamble with it but when you then decide to convert your winnings to cash there could be a gain?

Betting winnings are not subject to any tax.

AndrewJRenko

An Ri rua wrote: »

Betting winnings are not subject to any tax.

But you would still need to be able to show that the original source of your stake money is clean and taxed income.

An Ri rua

AndrewJRenko wrote: »

But you would still need to be able to show that the original source of your stake money is clean and taxed income.

Of course. Auditors follow the money

Shauny2010

Are losses Tax deductable? I know that investments made in P2P loans such as mintos where you make a loss on a loan cannot be offset against a profit on another loan. I wonder is the same is true for cryptos like Bitcoin?
For example If I made 10k on Bitcoin but lost 10k on some other crypto does one cancel the other? If that is the case could you then use the loss on any investment to offset against the CGT?

cnocbui

Shauny2010 wrote: »

Are losses Tax deductable? I know that investments made in P2P loans such as mintos where you make a loss on a loan cannot be offset against a profit on another loan. I wonder is the same is true for cryptos like Bitcoin?
For example If I made 10k on Bitcoin but lost 10k on some other crypto does one cancel the other? If that is the case could you then use the loss on any investment to offset against the CGT?

You can offset capital losses against capital gains, and carry such losses forward. I don't think there is any fire-walling by type, so if you sold shares at a loss, you could offset those against any crypto gains.

An Ri rua

cnocbui wrote: »

You can offset capital losses against capital gains, and carry such losses forward. I don't think there is any fire-walling by type, so if you sold shares at a loss, you could offset those against any crypto gains.

Yes, there is firewalling. Development Losses are handled differently. But most other losses/gains, no.

Cona

Question: can I gift say 30k worth of Bitcoin to a spouse tax free?

Example, I send 30k of BTC to spouse and she cashes it out at same price. Does she need to pay CGT on this?

Peregrinus

Your disposal of the asset to her does not attract CGT.

However she is treated as having acquired the asset on the date, and at the price, that you acquired it. When she disposes of it CGT is calculated on that basis.

If a married couple are both doing some investing does that mean our tax free allowance is x2? compared to a single person.

Peregrinus

Deleted User wrote: »

If a married couple are both doing some investing does that mean our tax free allowance is x2? compared to a single person.

Each of the couple has an annual small gains exemption. Note that they can't transfer this to one another, but of course they can transfer assets, or shares in assets, between themselves to ensure that both can use their small gains exemption.

Selik

Peregrinus wrote: »

Your disposal of the asset to her does not attract CGT.

However she is treated as having acquired the asset on the date, and at the price, that you acquired it. When she disposes of it CGT is calculated on that basis.

Is this definitely correct? I always thought that if an asset it gifted it is deemed as acquired by the beneficiary at the asset price on the date of the transfer.