Tax on Bitcoin Profits

exaisle

jobless wrote: »

how is gifting digital assets treated for tax..... say i gift an amount and its value trebles over the next 5 years... is the other person liable for CGT?

The recipient isn't liable for CGT until HE sells them, but you are immediately liable. CGT arises on the disposal/sale/gifting away of the asset. Gifting is treated in the same way for CGT purposes as if you had sold them with the exception that you have to place a value on the assets that you gifted. That will be the value that the recipient will use when he sells them, or if he's liable for CAT.

Depending on the amount, (if it's more than €3000) then the recipient may be liable for CAT (Capital Acquisitions Tax).

exaisle

Just one thing to note....the first €1270 of capital gains in any year is exempt.
So, where somebody holds assets that are fairly liquid, (easily converted into cash), they should sell a sufficient amount to generate a gain of €1,270 EVERY year. So, if you bought for €5,000 and the current value is €10,000, sell €2,540 worth, generating a capital gain of €1,270, which is exempt.
Then immediately buy €2,540 worth of the asset again.
Do this every year and save €419 each year.
Not much point if you're dealing in hundreds of thousands, but for the small investor it's worth while minimising their exposure to CGT for the sake of one transaction once a year.

AndrewJRenko

cnocbui wrote: »

Dual citizenship means I am an Irish citizen and have an Irish passport, so no visas or forms or either tax jurisdiction having any clue about anything.

Once you emigrate, you change legal and tax jurisdictions, unless you are an American. Revenue have a neck so long as to make a giraffe jealous, but even they have to pull it in on occasion and people emigrating is one of them. You leave the country, that's it - sayonara, and thanks for all the fish.

If you're talking about a permanent or long-term move, then yes, that's correct - once you've left the country, Revenue here say goodbye and Revenue NZ or whatever they are called take over - with pretty much the same degree of intelligence and access to information over there - so they will be paying as much attention to cash and property transactions over there.

I was really talking about the situation of people who reckon they can hide money or assets off shore and Revenue here won't find out.

Rd96

Mr.S wrote: »

All financial institutions will flag any deposits larger than approx 5k with revenue. If (more like when) Revenue follow up on that, is another story.

If you deposit frequent large sums it will also get flagged.

You would be mad to not declare and pay the correct tax.

If a bank account gets flagged what would be the normal procedure from Revenue?
If they decide a person should have been paying CGT and they haven't, what would they do ?

Peregrinus

Rd96 wrote: »

If a bank account gets flagged what would be the normal procedure from Revenue?
If they decide a person should have been paying CGT and they haven't, what would they do ?

They send you what amounts to a postcard which says, in essence, "We have reason to believe that you have undisclosed income/capital gains. Please comment." This marks the start of a dialogue in which you protest indignantly that you have no idea what they are talking about and they ask you rather more pointed questions, which gives you some hint about what they are on to, but you don't really know how much they know, and therefore you don't know what lies you can tell without risk of detection. With this kind of pressure on the one hand and on the other hand your tax advisers pointing out to you that the sooner and in more detail you make a full disclosure the lower the interest and penalties will be, the notion of stonewalling indefinitely begins to look unattractive. If you do stonewall, they issue you with an assessment based on what they know or believe, and it's then up to you to challenge the assessment by appealing it, and the sanctions for not making full disclosure in the appeals process are medieval in their severity. If you simply pay the assessment, they assume that in fact they pitched it too low, and there is more for the chasing, so expect further attention from them.

Of course, it all depends on whether they think you're worth chasing. It's a lot of work for them, and they prefer to put their energies into the people who have the highest unpaid liabilities. They generally aren't going to give you the full treatment for five hundred euro. Unless, perhaps, you're running an evasion arrangement which is small when viewed individually but which is run by many, many people, and they need to demonstrate that it is evasion, and you are one of their test cases.

jobless

exaisle wrote: »

Just one thing to note....the first €1270 of capital gains in any year is exempt.
So, where somebody holds assets that are fairly liquid, (easily converted into cash), they should sell a sufficient amount to generate a gain of €1,270 EVERY year. So, if you bought for €5,000 and the current value is €10,000, sell €2,540 worth, generating a capital gain of €1,270, which is exempt.
Then immediately buy €2,540 worth of the asset again.
Do this every year and save €419 each year.
Not much point if you're dealing in hundreds of thousands, but for the small investor it's worth while minimising their exposure to CGT for the sake of one transaction once a year.

anyone dealing with lower amounts of bitcoin for example if better off using local bitcoins or an atm to take out the money and spend it

ZeroThreat

Peregrinus wrote: »

They send you what amounts to a postcard which says, in essence, "We have reason to believe that you have undisclosed income/capital gains. Please comment." This marks the start of a dialogue in which you protest indignantly that you have no idea what they are talking about and they ask you rather more pointed questions, which gives you some hint about what they are on to, but you don't really know how much they know, and therefore you don't know what lies you can tell without risk of detection. With this kind of pressure on the one hand and on the other hand your tax advisers pointing out to you that the sooner and in more detail you make a full disclosure the lower the interest and penalties will be, the notion of stonewalling indefinitely begins to look unattractive. If you do stonewall, they issue you with an assessment based on what they know or believe, and it's then up to you to challenge the assessment by appealing it, and the sanctions for not making full disclosure in the appeals process are medieval in their severity. If you simply pay the assessment, they assume that in fact they pitched it too low, and there is more for the chasing, so expect further attention from them.

Of course, it all depends on whether they think you're worth chasing. It's a lot of work for them, and they prefer to put their energies into the people who have the highest unpaid liabilities. They generally aren't going to give you the full treatment for five hundred euro. Unless, perhaps, you're running an evasion arrangement which is small when viewed individually but which is run by many, many people, and they need to demonstrate that it is evasion, and you are one of their test cases.

It is possible that with the higher prominence of bitcoin in the media lately that revenue are closely watching any significant bank transfers to any of the better known crypto sites/exchanges and are compiling a dossier of names and addresses and who knows what other information.

At the end of the day, revenue and customs have more or less unlimited powers, far more than the Garda or any other organs of the state and can pretty much do anything they want.

McCrack

ZeroThreat wrote: »

It is possible that with the higher prominence of bitcoin in the media lately that revenue are closely watching any significant bank transfers to any of the better known crypto sites/exchanges and are compiling a dossier of names and addresses and who knows what other information.

At the end of the day, revenue and customs have more or less unlimited powers, far more than the Garda or any other organs of the state and can pretty much do anything they want.

Revenue commissioners and customs have certain powers under statute. They are far from unlimited and are subject to judicial scrutiny which any person can appeal to.

barneystinson

McCrack wrote: »

Revenue commissioners and customs have certain powers under statute. They are far from unlimited and are subject to judicial scrutiny which any person can appeal to.

If it relates to the previous 4 years their statutory powers to compel production of records relating to one's financial dealings effectively border on unlimited. Waste money on judicial review if you like.

cnocbui

Speaking of records. Does anyone know what gives regarding statements?

My banks all urge me constantly to turn off paper statements and to download pdf versions. Does this mean a pdf is acceptable as a tax record?

thierry14

Where can i buy bitcoin?

1000e worth

cnocbui

One place would be https://www.belgacoin.com/

Peregrinus

cnocbui wrote: »

Speaking of records. Does anyone know what gives regarding statements?

My banks all urge me constantly to turn off paper statements and to download pdf versions. Does this mean a pdf is acceptable as a tax record?

It generally will be accepted, yes. If the Revenue are concerned that it's a forgery they can of course look behind it, but the same goes for paper documents.

Coin123

exaisle wrote: »

Just one thing to note....the first €1270 of capital gains in any year is exempt.
So, where somebody holds assets that are fairly liquid, (easily converted into cash), they should sell a sufficient amount to generate a gain of €1,270 EVERY year. So, if you bought for €5,000 and the current value is €10,000, sell €2,540 worth, generating a capital gain of €1,270, which is exempt.
Then immediately buy €2,540 worth of the asset again.
Do this every year and save €419 each year.
Not much point if you're dealing in hundreds of thousands, but for the small investor it's worth while minimising their exposure to CGT for the sake of one transaction once a year.

On this, can expenses (fees) be used to offset the total gain? If so would they be fees across all Bitcoin trades that year or only those relating to the Bitcoin being sold. Even if those fees were incurred in another year?

Adren

Some of you might find this site useful if your hoping to get your CGT in order.

cointracking.info

You can pull transaction history from the main exchanges, and it builds a portfolio for you.

It's also has tax in mind, however it's for the US. But there is a 'Realized and Unrealized Gains' section, which if all the records are correct, should give you a good reading for these metrics.

I have a few questions though.

Say I have 1 BTC, and that is worth 5,000 euros when I purchase it, it then goes up to 11,270. I then 'dispose' of the BTC at 11,270 by buying 1 ETH ( Who's rate in euros will say is for this example is 11,270 ).

So my CGT on the BTC that I disposed of should be 1650 ( 33 percent of 5000 ( 11,270 - 1,270 exemption ) )

But how do I pay for this?

My BTC wasn't cashed out, but it was technically disposed of into ethereum, but I do not have realised gains in cash, so how would I pay the CGT?


Another question, if I gift my BTC to someone who lives in Germany, would I have to pay CGT on it? If so, again, how would I pay it?

barneystinson

Adren wrote: »

Some of you might find this site useful if your hoping to get your CGT in order.

cointracking.info

You can pull transaction history from the main exchanges, and it builds a portfolio for you.

It's also has tax in mind, however it's for the US. But there is a 'Realized and Unrealized Gains' section, which if all the records are correct, should give you a good reading for these metrics.

I have a few questions though.

Say I have 1 BTC, and that is worth 5,000 euros when I purchase it, it then goes up to 11,270. I then 'dispose' of the BTC at 11,270 by buying 1 ETH ( Who's rate in euros will say is for this example is 11,270 ).

So my CGT on the BTC that I disposed of should be 1650 ( 33 percent of 5000 ( 11,270 - 1,270 exemption ) )

But how do I pay for this?

My BTC wasn't cashed out, but it was technically disposed of into ethereum, but I do not have realised gains in cash, so how would I pay the CGT?


Another question, if I gift my BTC to someone who lives in Germany, would I have to pay CGT on it? If so, again, how would I pay it?

It's up to you to organise your affairs so that you can pay your tax liabilities.

Tigger

EndaHonesty wrote: »

CGT is liable on the profits from the sale of currency.

What is the legal definition of currency in Ireland?

I would imagine it would revolve around the term "legal tender".

IMO Cryptocurrencies are not, as of now, legal tender.

Until there is specific legislation around cryptocurrencies it is not factually correct to say the CGT is definitely liable on the sale of crypto.

As an asset, again IMO, until cryptocurrencies are specifically legislated for, there are no definite rules.

the is cgt on cg
you make a capital gain you pay tax
if you made stupid money then mive to malta before cashing out
otherwise just pay

Tigger

barneystinson wrote: »

It's up to you to organise your affairs so that you can pay your tax liabilities.

a wile ago revenue told me "we dont do your tax returns we enforce your tax returns "

Tigger

thierry14 wrote: »

Where can i buy bitcoin?

1000e worth

dont it s too late

EndaHonesty

Tigger wrote: »

the is cgt on cg
you make a capital gain you pay tax
if you made stupid money then mive to malta before cashing out
otherwise just pay

Do you know what a wasting chattel is?

barneystinson

EndaHonesty wrote: »

Do you know what a wasting chattel is?

You obviously don't, if you think you can shoehorn cryptocurrency into that category.

EndaHonesty

barneystinson wrote: »

You obviously don't, if you think you can shoehorn cryptocurrency into that category.

I'm asking a poster a question.

What has that got to do with you?

barneystinson

EndaHonesty wrote: »

I'm asking a poster a question.

What has that got to do with you?

Oh sorry, I thought it was an open forum, did I miss something?

EndaHonesty

barneystinson wrote: »

Oh sorry, I thought it was an open forum, did I miss something?

Well barney you obviously missed that I quoted a specific poster and asked that poster a direct question...

barneystinson

EndaHonesty wrote: »

Well barney you obviously missed that I quoted a specific poster and asked that poster a direct question...

So does that mean no one else gets to talk to you?

Do you know what a wasting chattel is?

Do you think cryptocurrency is a wasting chattel?

EndaHonesty

barneystinson wrote: »

So does that mean no one else gets to talk to you?

Do you know what a wasting chattel is?

Do you think cryptocurrency is a wasting chattel?

You obviously think it's an invitation to butt your fat head in...

Get over yourself barney.

I'll wait for the expert who was dishing out advice to answer my question...

barneystinson

EndaHonesty wrote: »

Talk to me?!

You should change your name to Travis Bickle

(Or Terry Tibbs)

EndaHonesty

barneystinson wrote: »

You should change your name to Travis Bickle

(Or Terry Tibbs)

Go find another thread to bore you div...

barneystinson

EndaHonesty wrote: »

Go find another thread to bore you div...

Back to the topic at hand...

Guidance on wasting chattels here:
https://www.charteredaccountants.ie/taxsource/1997/en/act/pub/0039/nfg/sec0603-nfg.html

.G.

Adren wrote:

My BTC wasn't cashed out, but it was technically disposed of into ethereum, but I do not have realised gains in cash, so how would I pay the CGT?

CGT only applies if you dispose of the assets into fiat currency so you won't be liable until you've converted it into hard cash.

barneystinson

superg wrote: »

CGT only applies if you dispose of the assets into fiat currency so you won't be liable until you've converted it into hard cash.

That is completely incorrect.

CGT arises on the disposal of an asset, based on the value of the consideration received.

Peregrinus

Which means that, if Adren disposes of his bitcoin and acquire eutherium, and if he realises a gain on the disposal of the bitcoin, he has a CGT liablity. How he pays it, as with any other tax liability, is his own affair. He can sell as much of the eutherium as is necessary. He can sell another asset. He can dip into his savings. He can borrow from the bank. He can go out and get a job and earn the money he needs. He can do it however he likes; the Revenue don't care.

Adren

Peregrinus wrote: »

Which means that, if Adren disposes of his bitcoin and acquire eutherium, and if he realises a gain on the disposal of the bitcoin, he has a CGT liablity. How he pays it, as with any other tax liability, is his own affair. He can sell as much of the eutherium as is necessary. He can sell another asset. He can dip into his savings. He can borrow from the bank. He can go out and get a job and earn the money he needs. He can do it however he likes; the Revenue don't care.

Thanks Peregrinus this is what I was looking for.

So even if I dispose of BTC by gifting it to someone, I would still be under the obligation to pay what ever was gain was made on the BTC?

Sorry for the basic questions, just new to this stuff.

I can see how if you buy and sell different cryptos CGT would be a nightmare to sort out.

The CGT exemption amount, that would be for each coin right?

CIARAN_BOYLE

Adren wrote: »

Thanks Peregrinus this is what I was looking for.

So even if I dispose of BTC by gifting it to someone, I would still be under the obligation to pay what ever was gain was made on the BTC?

Sorry for the basic questions, just new to this stuff.

I can see how if you buy and sell different cryptos CGT would be a nightmare to sort out.

The CGT exemption amount, that would be for each coin right?

Of course you are. They may also be obligated to pay gift taxes as well.

like any business proper record keeping is essential

Annual exemption across all capital gains

.G.

Hmmm, I was advised incorrectly then. I'll check the exact wording of what he said. I've only been keeping records of crypto that i convert into fiat, most of it is just trading from one crypto into another.

Edit : think it was something to do with cryptocurrency not being legal tender so revenue themselves aren't sure of their approach to it yet. It's easy if you sell if for euros bit if you use it to buy a different crypto is where I get hazy.

barneystinson

superg wrote: »

Hmmm, I was advised incorrectly then. I'll check the exact wording of what he said. I've only been keeping records of crypto that i convert into fiat, most of it is just trading from one crypto into another.

Edit : think it was something to do with cryptocurrency not being legal tender so revenue themselves aren't sure of their approach to it yet. It's easy if you sell if for euros bit if you use it to buy a different crypto is where I get hazy.

It's got nothing to do with it being legal tender or not, or the fact that it uses the word currency in its name.

It is an asset, and it has a readily ascertainable value. Revenue will have no problem in confirming the tax treatment if you ask them.

.G.

barneystinson wrote:

It is an asset, and it has a readily ascertainable value. Revenue will have no problem in confirming the tax treatment if you ask them.

But how do you put a value on it for cgt when it's changing from second to second, particularly if you dispose of it on a daily basis but aren't doing a tax return until October next year!

Seems like a lot of effort but I will for sure ask revenue about it and get it from the horses mouth.

CIARAN_BOYLE

superg wrote: »

But how do you put a value on it for cgt when it's changing from second to second, particularly if you dispose of it on a daily basis but aren't doing a tax return until October next year!

Seems like a lot of effort but I will for sure ask revenue about it and get it from the horses mouth.

Well cgt liabilities need to be paid before October of the following year.

Good records are essential. The valuation is the valuation at the moment of transaction.

If you trade in it at that moment you can check the value when you trade it.

.G.

CIARAN_BOYLE wrote: »

Well cgt liabilities need to be paid before October of the following year.

Good records are essential. The valuation is the valuation at the moment of transaction.

If you trade in it at that moment you can check the value when you trade it.

All the exchanges have records of what a person trades and when but it only records the amount of the coin traded and what it was traded into. It doesn't record the value of that coin in real currency because you haven't traded it into real currency. This is where I think things get murky. A lot of altcoins don't even have a Fiat trading pair so you can't even get a real money valuation of them.

Its something I trying to do now anyway, see if what I can make of it and fully intended to declare any earnings of real money , haven;t to figure out what everything is worth in real money is the issue, I don't think its as cut and dried as is made out but I intend to find out if I make a theoretical few quid!

.G.

Found this article which includes a letter from the finance minister of the time's private secretary.

https://bitcoinsinireland.com/irish-legal-position-march14reddit/

Dear drcross,

The Minister for Finance, Mr Michael Noonan TD, has asked me to thank you for your correspondence regarding Capital Gains Tax (CGT) and Bitcoin. The delayed reply is regretted.

CGT is chargeable on gains made on the disposal of assets. Section 532(b) Taxes Consolidation Act 1997 states that any currency other than the currency of the State is an asset for CGT purposes. Where a person acquires any foreign currency i.e. other than Euro, he/she has acquired an asset for CGT purposes. If that person subsequently converts that foreign currency into Euro or into another foreign currency that would constitute a disposal of an asset for CGT purposes.

Crypto-currencies, such as Bitcoin, are not legal tender in the Euro area. E-commerce, including the use of virtual currencies, presents a challenge to tax administrations throughout the world. The Revenue Commissioners and tax administrations in other countries are actively monitoring developments. From the information provided, it is not clear how Bitcoin would be treated for CGT purposes.

However, it is likely that gains accruing from speculation on Bitcoin would be liable for CGT in the normal way.

Persons are chargeable to CGT on such gains for a year depending on their residence and domicile.

The first EURO 1,270 of an individual’s net gains for a year (that is gains minus current year losses and losses brought forward from earlier years), is exempt from CGT with the balance taxed at a standard rate of 33%.

As regards reinvesting the proceeds of disposals of Bitcoin in tech startups,

a capital gains tax relief for entrepreneurs who reinvest the proceeds from the disposal of assets made on or after 1 January 2010 in certain chargeable business assets was announced by the Minister in Budget 2014.

The necessary legislation governing this relief is included in Section 45 of Finance (No 2) Act of 2013. Commencement of the legislative provisions is subject to EU state-aid approval. The purpose of the incentive is to encourage entrepreneurial activity by encouraging individuals who have disposed of assets in recent years to re-invest the proceeds into new productive business activities.

Subject to EU approval, the relief will apply from 1 January 2014 to individual entrepreneurs:

· – who have made disposals of assets since 1 January 2010 on which they have paid capital gains tax;

· – who invest at least EURO 10,000, in the period from 1 January 2014 to 31 December 2018, in acquiring chargeable business assets that will be used in a new business and

· – who subsequently (after a minimum period of 3 years) dispose of those chargeable business assets at a gain giving rise to a capital gains tax liability.

The relief will be given on the tax due on any chargeable gain arising on the subsequent disposal of the chargeable assets after a minimum period of 3 years and will amount to the lower of:

Ø the full amount of capital gains tax paid on the initial disposal made since 1 January 2010, or

Ø 50% of the CGT payable on the disposal of the new chargeable business assets.

If an entrepreneur reinvests the proceeds of that subsequent disposal in a further new business in the 2014-2018 period, the relief can also apply on a subsequent disposal of the chargeable business assets of that further new business. Where less than the full proceeds of a disposal on which capital gains tax has been paid are reinvested, only that proportion of the capital gains tax relative to the amount reinvested will qualify for relief.

The relief will be given in the form of a tax credit equal to the lower of the capital gains tax paid on the disposal of assets made on or after 1 January 2010 or 50% of the capital gains tax on any gain from the future disposal of the chargeable business assets.

The Minister hopes this information is of asistance.

Yours sincerely

Alex Lalor

Private Secretary

To me that means cgt due on gains when you convert it into actual money but I reckon I need professional advice on all this!

nxbyveromdwjpg

barneystinson wrote: »

That is completely incorrect.

CGT arises on the disposal of an asset, based on the value of the consideration received.

In practice the revenue have no interest in your selling dogecoin for neo and ethereum for zcoin and zencoin to btc.

They are interested in your gains in fiat currency when you cash out v what you paid in.

AndrewJRenko

superg wrote: »

But how do you put a value on it for cgt when it's changing from second to second, particularly if you dispose of it on a daily basis but aren't doing a tax return until October next year!

Seems like a lot of effort but I will for sure ask revenue about it and get it from the horses mouth.

It's just the same as any share trade - price changes from second to second, so you just record the price of your own trade.

barneystinson

Itzel Careful Treasure wrote: »

In practice the revenue have no interest in your selling dogecoin for neo and ethereum for zcoin and zencoin to btc.

They are interested in your gains in fiat currency when you cash out v what you paid in.

What makes you think that?

They're interested in correctly and fairly applying tax legislation and ensuring people pay the right tax at the right time.

All of the transactions you've listed above, are separate disposals of assets for CGT purposes.

Peregrinus

superg wrote: »

But how do you put a value on it for cgt when it's changing from second to second, particularly if you dispose of it on a daily basis but aren't doing a tax return until October next year!

As others have pointed out, lots of assets have values that change from second to second - e.g. shares. All that matters is the value the asset had at the time of the transaction, which is most cases is identified by looking at the value of the consideration given or received. In the case of cryptocurrencies, valuation is generally fairly easy, since all cryptocurrencies, all the time, are exchangeable for euros, and records exist of the exchange rates available from time to time.

Yes, of course you have to keep records of the amounts and values of your cryptocurrency transactions, but you'd be doing that anyway, wouldn't you? Unless you're genuinely completely indifferent to how much money you're making or losing. So this isn't a particularly onerous obligation, and no different to the obligation imposed on anyone who invests and divests in assets of any other kind.

You can ask the revenue about tax treatment if you like, but there's a quick and dirty way to get reliable answers without waiting on the revenue. For any question you have about the tax treatment of a transaction involving cryptocurrency, just ask yourself what would the treatment be for the corresponding transaction involving any currency other than euro. If you sell USD for JPY, how will that be taxed? Well, the same treatment will apply to your sale of bitcoin for eutherium.

McCrack

Some of you here might wish to take a step back and look at what you're spouting arguing the tax code, its finer points and its interpretation and that it must apply to cryptos and must be paid like all good citizens do.

The very people Im sure that pay their RTE tax because they are told to.

I have to also say the sense of righteousness is nauseating.

Peregrinus

McCrack wrote: »

Some of you here might wish to take a step back and look at what you're spouting arguing the tax code, its finer points and its interpretation and that it must apply to cryptos and must be paid like all good citizens do.

The very people Im sure that pay their RTE tax because they are told to.

I have to also say the sense of righteousness is nauseating.

People are asking questions about the tax treatment of transactions involving cryptocurrency. Presumably, they ask these questions because they have an interest in the answers.

Answering their questions by reference to the tax code is "righteousness"? It's "nauseating"? Seriously?

cnocbui

barneystinson wrote: »

What makes you think that?

They're interested in correctly and fairly applying tax legislation and ensuring people pay the right tax at the right time.

All of the transactions you've listed above, are separate disposals of assets for CGT purposes.

Given the quote above, it seems very clear that there is no legislation yet on which revenue can correctly base an opinion. I think disposal of a crypto aught to be judged to occur on conversion into a fiat currency, otherwise the whole thing would be an unnecessarily complicated mess. Many cryptos can not be exchanged directly for fiat on any exchange, so the have essentially no value. To convert them to fiat you have to go through at least one secondary conversion and possibly more, given not all exchanges carry all cryptos. Is a separate CGT event going to be deemed for each cross conversion necessary to get to fiat?

Many multiplayer games have in-game items that can be exchanged and purchased and earned, some of which can change hands for considerable amounts of fiat. If you swap your Sword of Unintended Consequences for Azorath's Potion of Fecundity, has a CGT event occurred? I have some very rude words for anyone who would seriously think that is the case.

AndrewJRenko

McCrack wrote: »

Some of you here might wish to take a step back and look at what you're spouting arguing the tax code, its finer points and its interpretation and that it must apply to cryptos and must be paid like all good citizens do.

The very people Im sure that pay their RTE tax because they are told to.

I have to also say the sense of righteousness is nauseating.

Please make sure you don't go to any publicly funded hospital or taxpayer supported GP for treatment of your nausea. Because that kind of hypocrisy would really be nauseating.

Peregrinus

There are no special rules for cryptocurrencies because there are no special rules for most asset classes. Cryptocurrencies are in principle taxed just like any other asset. In particular, they are taxed just like other currencies. Why would they not be? They are designed and intended to function as currency and do in fact function as currency (as in, you can buy stuff with them); why would they not be taxed in the same way that currency is taxed?

The notion that this creates an "unecessarily complicated mess" is not very appealing. People maintain records of their transactions in conventional foreign currencies, not just so they can deal with their tax returns but more bascially so that they can keep track of their own affairs, and know whether they are making or losing money and, in either case, how much. These are matters of some moment to most people, and I imagine people who invest in cryptocurrency are not fundamentally different in their attitude to their investments than people who invest in anything else.

As for cross conversion through several currencies - assuming you make all the transactions on the same day, most of them are going to be on a no-gain, no-loss basis, and even if there are gains or losses it seems to me that they should net out. Revenue will probably be happy with an accounting which starts with the holding of (say) bitcoin that you had at 9:00 am and then skips straight to the amount of euros you had at 5:00 pm, and you can treat yourself as having disposed of X bitcoin for Y euros, net of transaction costs.

CIARAN_BOYLE

cnocbui wrote: »

Given the quote above, it seems very clear that there is no legislation yet on which revenue can correctly base an opinion.

I always think it's amusing that people think there need to be separate legislation for each class of transactions before tax applies to them.

Cryprocurrency is not really that unique or special. It could just as easily be poppy futures or widgets and it would be taxed the same way.