Can we pool our knowledge regarding TAX and crypto and make some kind of FAQ/sticky?

AlmightyCushion

Noctifer wrote: »

You would lose money on the ETH to XRP transfer but you would have a gain on the XRP to EUR transfer (or whatever other fiat or crypto currency).

I'm not talking about tax here. According to his figures, it's free money.

I buy 1000 ETH for €138,000 and immediately exchange it for 126,000 XRP. Then I immediately sell the XRP for €152,460. I've made 10% profit for just doing a few trades.

Is there something wrong with his figures that the euro price of ETH and XRP are over 10% out at the same time?

Emmo-m-

Noctifer wrote: »

Coinbase would not release the info unless the would be required by law, like a court order. The have legal battles with the IRS in the states. The IRS was request all the info on all the users, they got it down to some of them, not all.

But you should assume that Revenue will get the info from exchanges at one point in time.

But they can't request from a decentralized exchange where there is no central point for the data being stored and no single entity behind it.

Cryptonovice

AlmightyCushion wrote: »

I'm not talking about tax here. According to his figures, it's free money.

I buy 1000 ETH for €138,000 and immediately exchange it for 126,000 XRP. Then I immediately sell the XRP for €152,460. I've made 10% profit for just doing a few trades.

Is there something wrong with his figures that the euro price of ETH and XRP are over 10% out at the same time?

Possibly..fair play for poining it out..I should be getting equal??

Or should I be going with "Noctifiers" method of the original ETH value at purchase vs value of ETH at swap?

Noctifer

AlmightyCushion wrote: »

Is there something wrong with his figures that the euro price of ETH and XRP are over 10% out at the same time?

If that's the price of XRP and ETH on the exchange then that's the price. My only question is if you can convert the XRP to EUR or do you have to convert it back to BTC?

There are time when cryptoA -> cryptoB -> fiat yields money.

AlmightyCushion

Cryptonovice wrote: »

Possibly..fair play for poining it out..I should be getting equal??

Or should I be going with "Noctifiers" method of the original ETH value at purchase vs value of ETH at swap?

For CGT purposes, I'd go with the euro price of ETH at the time of disposal. I was just curious about your figures.

Cryptonovice

AlmightyCushion wrote: »

For CGT purposes, I'd go with the euro price of ETH at the time of disposal. I was just curious about your figures.

Cheers bud.
I think peregrinus was viewing this as cost of aquisition of asset A vs value of Asset B after swap/exchange!

GreeBo

Cryptonovice wrote: »

So am I wrong in assuming if I buy ETH @ €150 and get 126 XRP @ €1.21 = €152.46 that my answer is not a gain of €2.46...its the value of the ETH when I swapped it which was €138...so a loss of €12???

You made a gain of 2.46 on your ETH disposal.

Though your figures seem wrong, if the ripple is worth 152.46 and you bought it with ETH then it's also worth 152.46.

Are you sure fees etc aren't confusing matters here?

Cryptonovice

GreeBo wrote: »

You made a gain of 2.46 on your ETH disposal.

Though your figures seem wrong, if the ripple is worth 152.46 and you bought it with ETH then it's also worth 152.46.

Are you sure fees etc aren't confusing matters here?

Hey greebo.
I spent €150 on ETH on coinbase @ €637.30 per ETH. I got + 0.22810297 ETH. Receipt screen shot says fee €1, subtotal €145.37 and total €150. (€3.63 hidden fee??) Anyone on coinbase get this??

I then sent 6 minutes later -0.22810297ETH to binance. The ETH value at this moment on coinbase says €133.73.
The send fee from coinbase was 0.00042000 ETH.

I go to coinmarket historic prices for both XRP and ETH to within 5 minutes of the swap on binance. XRP is €1.21 and ETH is €606.75.

(€1.21/€606.75 = 0.00199423156)
Binance says my trading price at the time was 0.001789.
I got 126 XRP.
Order amount = 0.22541400 ETH
Fee 0.12600000XRP.

My basic thought pattern was €150 acquisition cost- €1.21x 126 = €152.46.....€2.46

I will send XRP to whoever figures me this one. I got a D in maths but im smart enough to realise that the 9-5 won't get me out of the rat race!

Peregrinus

Cryptonovice wrote: »

Cheers bud.
I think peregrinus was viewing this as cost of aquisition of asset A vs value of Asset B after swap/exchange!

It's (proceeds of disposal) less (costs of acqusition).

When you dispose of ETH by swapping it for XRP, the proceeds of disposal is the XRP that you get, so what you are looking for is the value of the XRP.

However, as you are swapping ETH for the XRP, the value of the ETH and the value of the XRP must be the same, unless either you or your transaction counterparty are very stupid, which is not the normal state of affairs. So whichever way you do the calculation, you should get pretty much the same result.

If you get materially different results, check your figures; something is probably amiss. But if everything is definitely spot-on and you are still getting different results, then you should go with the calculation which uses the value of the XRP because that, strictly speaking, is what the tax legislation requires.

lifeandtimes

Can any of the tax savy people let me know the answer to this.

Say if the crypto you have amount to a couple of million, you transfer it to fiat on exchange and then up and leave the country say to Belgium spending the gains you made over there for a 5 years and the come back to Ireland, are you still liable for the CGT on the crypto you made 5 years previous?

barneystinson

lifeandtimes wrote: »

Can any of the tax savy people let me know the answer to this.

Say if the crypto you have amount to a couple of million, you transfer it to fiat on exchange and then up and leave the country say to Belgium spending the gains you made over there for a 5 years and the come back to Ireland, are you still liable for the CGT on the crypto you made 5 years previous?

Asked and answered, how does this question differ from any of a gazillion other scenarios already dealt with?

If you are resident, or ordinarily resident, here, and of Irish domicile, then you are within the scope of Irish CGT on your worldwide gains.

If you transfer your crypto to fiat, that is a disposal of your crypto. If that disposal gives rise to a gain... see above... this is NOT rocket science.

Cryptonovice

Folks coin tracking.info is absolutely brilliant.
Just a quick one..when creating a new tax report with cointracking.info what settings would be specific to us...like is it FIFO always we select
Also it has two options for "tax short term" and "tax long term". Should we put 33% in one, both or none..thanks

Peregrinus

In both. Some countries tax gains more heavily if you have only held the asset for a short time, but Ireland is not one of these.

lifeandtimes

Obviously Wikipedia isn't the most reliable but I read this and thought it was interesting.

"Tax may be deferred if the taxpayer sells the asset but receives payment from the buyer over a period of years. However, the taxpayer bears the risk of a default by the buyer during that period. A structured sale or purchase of an annuity may be ways to defer taxes."

I doubt this applied to Ireland but is interesting to think thay instead of cashing out your crypto you sold them to someone who pays you a yearly fee for them

.G.

Cryptonovice wrote: »

Folks coin tracking.info is absolutely brilliant.
Just a quick one..when creating a new tax report with cointracking.info what settings would be specific to us...like is it FIFO always we select
Also it has two options for "tax short term" and "tax long term". Should we put 33% in one, both or none..thanks

Generate a report using each of the conversion methods too. Each one gave a different gain when I did mine.

Peregrinus

lifeandtimes wrote: »

Obviously Wikipedia isn't the most reliable but I read this and thought it was interesting.

"Tax may be deferred if the taxpayer sells the asset but receives payment from the buyer over a period of years. However, the taxpayer bears the risk of a default by the buyer during that period. A structured sale or purchase of an annuity may be ways to defer taxes."

I doubt this applied to Ireland but is interesting to think thay instead of cashing out your crypto you sold them to someone who pays you a yearly fee for them

It's very unlikely, I think, that you would find a purchaser willing to buy an assets as volatile as crypto on these terms, and if you did I think there'd be a high risk of default. Who is going to continue, year after year, paying out the balance of an agreed purchase price of say $100,000 for a holding of crypto which is now worth a fraction of that?

If you made such a deal with someone connected to you - a family member, say - the revenue would simply interpose the market value of the crypto at the time of the deal for the purposes of calculating your CGT liablity. For the reason given I think it's very unlikely that you could make such a deal with an arm's length purchaser and, even if you could, it might not be wise. But I'm not sure what the tax treatment would be.

barneystinson

Peregrinus wrote: »

It's very unlikely, I think, that you would find a purchaser willing to buy an assets as volatile as crypto on these terms, and if you did I think there'd be a high risk of default. Who is going to continue, year after year, paying out the balance of an agreed purchase price of say $100,000 for a holding of crypto which is now worth a fraction of that?

If you made such a deal with someone connected to you - a family member, say - the revenue would simply interpose the market value of the crypto at the time of the deal for the purposes of calculating your CGT liablity. For the reason given I think it's very unlikely that you could make such a deal with an arm's length purchaser and, even if you could, it might not be wise. But I'm not sure what the tax treatment would be.

The tax treatment would be that unless the ultimate consideration receivable could not be quantified, CGT crystallises on the full amount immediately. So it's actually about as bad an idea as one could possibly come up with - owe all the tax now, but not be getting paid until sometime in the future (if at all).

Peregrinus

superg wrote: »

Generate a report using each of the conversion methods too. Each one gave a different gain when I did mine.

Well, they would, since they are different conversion methods.

I haven't looked at the various conversion methods used, so I express no opinion as to which would, and which would not, be acceptable to the Irish revenue. If you're dealing in crypto on a scale that means it makes a material difference to your tax bill which conversion method you use, well, you're probably dealing on a scale where it makes sense for you to get some professional tax advice anyway, so your adviser can deal with this for you.

But, handy hint: Whichever conversion method you choose, the Revenue will expect you to apply it consistently. You can't pick and choose a conversion method separately for each transaction. So if it makes a difference which conversion method you use, think carefully about which one you want; you'll be stuck with whatever you choose.

And, handy hint number 2: As a rough rule of thumb, conversion methods which tend to work out favourably for the taxpayer in a rising market will work badly for the taxpayer in a falling market, and vice versa.

Cryptonovice

superg wrote: »

Generate a report using each of the conversion methods too. Each one gave a different gain when I did mine.

Ya same here two different answers. Be good to know the right boxes too tick! Just to be sure. Im getting -€13.99 in one report and +€0.26 in another

Peregrinus

Cryptonovice wrote: »

Ya same here two different answers. Be good to know the right boxes too tick! Just to be sure. Im getting -€13.99 in one report and +€0.26 in another

On those figures, it does not matter which you use.

Uncle Mclovin

https://www.charteredaccountants.ie/knowledge-centre/Tax/Thought-Leadership/crypto-taxes?utm_medium=email&utm_campaign=Chartered%20Accountants%20Tax%20News%2019%20February%202018&utm_content=Chartered%20Accountants%20Tax%20News%2019%20February%202018+CID_7a818616e1ed1243c9b729ab2cae30f0&utm_source=CreateSend%20Email%20Newsletter&utm_term=Sunday%20Business%20Post

This article was posted by Brian Keegan in the Sunday Business Post. He is the Director of Public Policy and Taxation for Chartered Accountants Ireland so he carrys a bit of weight.

Hopefully this will kickstart Revenue into issuing some guidance on the topic.

Peregrinus

Uncle Mclovin wrote: »

https://www.charteredaccountants.ie/knowledge-centre/Tax/Thought-Leadership/crypto-taxes?utm_medium=email&utm_campaign=Chartered%20Accountants%20Tax%20News%2019%20February%202018&utm_content=Chartered%20Accountants%20Tax%20News%2019%20February%202018+CID_7a818616e1ed1243c9b729ab2cae30f0&utm_source=CreateSend%20Email%20Newsletter&utm_term=Sunday%20Business%20Post

This article was posted by Brian Keegan in the Sunday Business Post. He is the Director of Public Policy and Taxation for Chartered Accountants Ireland so he carrys a bit of weight.

Hopefully this will kickstart Revenue into issuing some guidance on the topic.

There's not much in the article to suggest that any Revenue guidance is needed. The thrust of the article is that cryptos present an evasion opportunity, and this may require some action. But people minded to evade their taxes are not going to comply with Revenue guidance in any event, so whatever that action is, it's not guidance.

barneystinson

Uncle Mclovin wrote: »

https://www.charteredaccountants.ie/knowledge-centre/Tax/Thought-Leadership/crypto-taxes?utm_medium=email&utm_campaign=Chartered%20Accountants%20Tax%20News%2019%20February%202018&utm_content=Chartered%20Accountants%20Tax%20News%2019%20February%202018+CID_7a818616e1ed1243c9b729ab2cae30f0&utm_source=CreateSend%20Email%20Newsletter&utm_term=Sunday%20Business%20Post

This article was posted by Brian Keegan in the Sunday Business Post. He is the Director of Public Policy and Taxation for Chartered Accountants Ireland so he carrys a bit of weight.

Hopefully this will kickstart Revenue into issuing some guidance on the topic.

Interesting to note that nowhere in that article does he suggest there's any ambiguity or uncertainty about how transactions in crypto are taxed.

.G.

Peregrinus wrote: »

Well, they would, since they are different conversion methods.

I haven't looked at the various conversion methods used, so I express no opinion as to which would, and which would not, be acceptable to the Irish revenue. If you're dealing in crypto on a scale that means it makes a material difference to your tax bill which conversion method you use, well, you're probably dealing on a scale where it makes sense for you to get some professional tax advice anyway, so your adviser can deal with this for you.

But, handy hint: Whichever conversion method you choose, the Revenue will expect you to apply it consistently. You can't pick and choose a conversion method separately for each transaction. So if it makes a difference which conversion method you use, think carefully about which one you want; you'll be stuck with whatever you choose.

And, handy hint number 2: As a rough rule of thumb, conversion methods which tend to work out favourably for the taxpayer in a rising market will work badly for the taxpayer in a falling market, and vice versa.

The options:-

Conversion of coins in your local currency:

In order to calculate your gain and tax, all your trades must be converted into your local currency at the time of the transaction.

Let's say you bought 60 ETH for 1 BTC.

Transaction Prices: will convert 60 ETH into your local currency

Counterpart Prices: will convert 1 BTC into your local currency

Best Prices: the currency with the lowest conversion difference (spread) is used in this order:
1. Fiat currencies (USD, EUR, GBP...)
2. Bitcoins (BTC)
3. Altcoins and commodities (ETH, LTC, XAG...

Transaction prices gave the lowest tax for me. Best prices was mid range and counterpart was the highest. I'd have thought transaction prices would be the safest bet anyway given its what the transaction actually cost me at the time fore what I actually bought, not what I used to buy it.

Anyway I was wrong that I didn't owe any tax for last year. I owe just over €100 but since both payment periods have now passed I don't know what to do. I also have no idea how that would have been split into the two reporting periods since the website doesn't give me those options. I'd probably have to generate two reports but for such a small amount I can't be arsed and the payment periods have passed anyway.

barneystinson

superg wrote: »

The options:-



Transaction prices gave the lowest tax for me. Best prices was mid range and counterpart was the highest. I'd have thought transaction prices would be the safest bet anyway given its what the transaction actually cost me at the time fore what I actually bought, not what I used to buy it.

Anyway I was wrong that I didn't owe any tax for last year. I owe just over €100 but since both payment periods have now passed I don't know what to do. I also have no idea how that would have been split into the two reporting periods since the website doesn't give me those options. I'd probably have to generate two reports but for such a small amount I can't be arsed and the payment periods have passed anyway.

What's the significance of the payment periods having passed?

Peregrinus

The payment periods having passed doesn't reduce the urgency of the matter; it increases it.

You don't have to send detailed calculations when making your payments in December and January, so far as I know. Details don't have to be given until you file your form CG1, and there you can consolidate details for the whole tax year, so just one report is needed.

Cryptonovice

Peregrinus wrote: »

The payment periods having passed doesn't reduce the urgency of the matter; it increases it.

You don't have to send detailed calculations when making your payments in December and January, so far as I know. Details don't have to be given until you file your form CG1, and there you can consolidate details for the whole tax year, so just one report is needed.

So when sending the cg1 form should we send info separately with it to show proof of the figures entered into the cg1 form? Like a4 print outs of the calculations from cointracking website or is this only necessary to produce in the event of an audit!

.G.

barneystinson wrote: »

What's the significance of the payment periods having passed?

Because I have no idea about how I go about paying it. From what I've read, I need to send it in with a CGT payslip, I don't know what that is or where I get one and I also read that CGT payslips are issued for each period, since we are passed both I'm not sure I can still get one either. I was a planning on asking them once they eventually reply to my original questions from weeks ago as I wanted to see their response to those questions before I pay anything.

As for the urgency of the situation, I'm not too fused to be honest, it's a oner, not a million. If interest and penalties are applied there's nowt I can do about it now anyway and they know nothing about my gains or otherwise either way unless I tell them.

Cryptonovice

I am assuming you broke the 1270 euro threshold...If its just 100 euro then you dont need to do the cgt form..Obvious point but just saying

Peregrinus

superg wrote: »

Because I have no idea about how I go about paying it. From what I've read, I need to send it in with a CGT payslip, I don't know what that is or where I get one and I also read that CGT payslips are issued for each period, since we are passed both I'm not sure I can still get one either . . .

You can get them from the links on this page.

If you're in default, and need to make CGT payments in respect of previous years, just use payslips for the current year and cross out "2018" at the top, inserting instead whatever year you are making payments for.

.G.

What's the idea behind two different payment periods anyway? Seems a bit uneccesary, especially when only covers one month.

Peregrinus

superg wrote: »

What's the idea behind two different payment periods anyway? Seems a bit uneccesary, especially when only covers one month.

No idea, I'm afraid. It may have been introduced so that the bulk of CGT arising in respect of transactions in any year would be received in that year, to improve government cashflow (and create a one-off jump in CGT receipts). But that's just a guess.

Cryptonovice

Taxback.com quoted me 75 euro to file a CG1 return..Not bad..400euro elsewhere it seems..Just if anyone wanted to know..Alot of accountancy companies are hanging up when they hear the word cryptocurrency!!lol

.G.

Should paye workers be using form 12?

Cryptonovice

superg wrote: »

Should paye workers be using form 12?

Cg1 form if you are a paye worker and you don't usually submit returns!
I think the form 12 is for full-time self employed folk...
Correct me if I am wrong!!

.G.

The webpage says form 12 if you are a paye worker and CG1 if you don't normally submit annual returns which would also apply to a PAYE worker so .......

CG1 far easier to fill out, I'd do that myself, a lot more going on with form 12 though!

Cryptonovice

superg wrote: »

The webpage says form 12 if you are a paye worker and CG1 if you don't normally submit annual returns which would also apply to a PAYE worker so .......

CG1 far easier to fill out, I'd do that myself, a lot more going on with form 12 though!

Its the cg1 form you fill out...any tips actually on filling it out! A €13.99 loss in my case..would be a shame to have to pay someone €75 to do that lol

Dades

Sign up for Revenue online and do it all there.

I filed a whole self-employed return online last year it's pretty straightforward once you're set up.

Cryptonovice

Dades wrote: »

Sign up for Revenue online and do it all there.

I filed a whole self-employed return online last year it's pretty straightforward once you're set up.

Ya its a great online resource...CG1 return form has to be sent in a physical envelope though I think!

.G.

Cryptonovice wrote: »

Its the cg1 form you fill out...any tips actually on filling it out! A €13.99 loss in my case..would be a shame to have to pay someone €75 to do that lol

Questions on it seemed fairly straight forward to me.

CryptoMad

How are investors calculating historical trades for a specific time of day.

For example on the 2nd January at 1 pm I bought Bitcoin. The following day at 10pm I converted Bitcoin to Altcoins.

In any one day the price of Bitcoin can increase or decrease by 20% + (AM Bitcoin €10k PM Bitcoin €12k)

When you calculate the price of Bitcoin on an historical trade, is there a way of calculating the hourly rate to fiat?

I am aware that CoinMarketCap provides a tool that you can use to view the daily price I.e. close price. But this tool does not indicate the price at 1pm on the 2nd January.

Cryptonovice

CryptoMad wrote: »

How are investors calculating historical trades for a specific time of day.

For example on the 2nd January at 1 pm I bought Bitcoin. The following day at 10pm I converted Bitcoin to Altcoins.

In any one day the price of Bitcoin can increase or decrease by 20% + (AM Bitcoin €10k PM Bitcoin €12k)

When you calculate the price of Bitcoin on an historical trade, is there a way of calculating the hourly rate to fiat?

I am aware that CoinMarketCap provides a tool that you can use to view the daily price I.e. close price. But this tool does not indicate the price at 1pm on the 2nd January.

Cointracking.info you should use...input all your csv files from your exchanges and Cointracking.info will do the rest..exact prices at historical times

Seurat

If I register for cointracking.info and pay the €300 fee can I claim that back somehow?

Peregrinus

Andeargdoom wrote: »

If I register for cointracking.info and pay the €300 fee can I claim that back somehow?

No, I don't think so.

If you were trading in bitcoin, and your earnings were being taxed as income, the costs of professional advice/services connected with the preparation of your tax return would be deductible as an expense of the trade.

But if you are accounting for your bitcoin dealings as an investment, you get the benefit of lower CGT rates, but the only deductible expenses are the expenses of buying and selling. Additional expnses that you incur for tax compliance purposes are not deductible.

If you effected your transactions through an exchange which provided that level of detail/information routinely, and the cost of this was built into the commissions charged on trades, then it would be deductible.

unkel

Mining not taxed in Germany!

See the links in the resources thread

thegolfer

unkel wrote: »

Mining not taxed in Germany!

See the links in the resources thread

Unfortunately you're wrong here.

The ruling is in respect of VAT, not income tax or CGT.

The mining is deemed a service, however voluntary, and thus exempt for VAT purposes.

No connection with regard to supply for consideration of a taxable supply of a good or service.

VAT is a consumption tax, on transactions, unlike income tax or cgt on profits\gains.

Back to the drawing board..

unkel

Looks like you're right. The english language article is somewhat misleading, but if you look at the original German ruling, it is clear this is just about VAT:

"Umsatzsteuerliche Behandlung von Bitcoin und anderen sog. virtuellen Währungen"

Umsatzsteuer is VAT
Umsatzsteuerliche Behandlung is VAT treatment

Seurat

When I’m using cointracking.info does anyone know what to fill out on the tax reporting sheet settings for short and ling term percentages?

barneystinson

Andeargdoom wrote: »

When I’m using cointracking.info does anyone know what to fill out on the tax reporting sheet settings for short and ling term percentages?

There's only a single rate in Ireland, which is 33%.

Seurat

barneystinson wrote: »

Andeargdoom wrote: »

When I’m using cointracking.info does anyone know what to fill out on the tax reporting sheet settings for short and ling term percentages?

There's only a single rate in Ireland, which is 33%.

Thanks,
Appreciate the help