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

Radsky

That is what I plan to do. I have been trading Eth and other altcoin pairs but have not seen any gains. You are at the mercy of the price change of both coins whereas trading in fiat you only need to consider the price change in one coin. I will see in 2 weeks if this will be more profitable.

Fakent.ie

Radsky wrote: »

That is what I plan to do. I have been trading Eth and other altcoin pairs but have not seen any gains. You are at the mercy of the price change of both coins whereas trading in fiat you only need to consider the price change in one coin. I will see in 2 weeks if this will be more profitable.

I don't know if you realized but right now we are in a "bear market" its very very difficult right now to make any profit. right now I wouldn't trade at all I haven't actually in the last 1/2 weeks because of this I would recommend not either but when we get out of this, we will see a lot of alts growing. What coins are you trading with?

Halflifept

It was recommended previously but www.cointracking.info looks like does the job for taxes with FIFO. Its just import the .CVS taken from the exchanges/wallets.
It does a free report for a limited number of trades..limiting the time frame might help as a workaround.
Otherwise this really looks like a big pain in the hoop to do in an excel spreadsheet when you start playing with multiple exchanges / coins.

Noctifer

Fakent.ie wrote: »

I don't know if you realized but right now we are in a "bear market" its very very difficult right now to make any profit. right now I wouldn't trade at all I haven't actually in the last 1/2 weeks because of this I would recommend not either but when we get out of this, we will see a lot of alts growing. What coins are you trading with?

That's why I like day trading. Even though we are in a bear market I still manage to make gains on a daily basis. And the fact that I am in fiat most the time I can sleep soundly without worries that a good chunk of my investment is gone over night.

Fakent.ie

Noctifer wrote: »

That's why I like day trading. Even though we are in a bear market I still manage to make gains on a daily basis. And the fact that I am in fiat most the time I can sleep soundly without worries that a good chunk of my investment is gone over night.

at some point we won't be in a bear market being in fiat you need to judge when that bounce will be which wont be easy, you could buy back in at 13k and it drop back to 9k, always being in bitcoin and going on the "fact" that long term it will go up means that accumulating more now you'll just be better off in the future this way you'll have more btc so you don't ever need to judge that bounce either, that is if you are long term bullish on btc

if you have 10k and make 12k when bitcoin is 11k right now then bitcoin when your not looking suddenly jumps to 15k then your gona have to buy in at a much higher price,


Whats wrong with daily trading and leaving your money in bitcoin?

Peregrinus

Fakent.ie wrote: »

at some point we won't be in a bear market being in fiat you need to judge when that bounce will be which wont be easy, the other way you'll have more btc so you don't ever need to judge that, that is if you are long term bullish on btc

Day traders, by definition, are not taking a long term view. A day trader literally does not care what the price of the asset will be tomorrow, never mind next month or next year. Just as Noctifer doesn't mind being in a bear market, he will equally see no advantage in being in a bull market.

And, judging from the number of posters complaining about the work associated with reporting a very large number of trades, there are more than a few day traders playing in the crypto markets.

Fakent.ie

Peregrinus wrote: »

Day traders, by definition, are not taking a long term view. A day trader literally does not care what the price of the asset will be tomorrow, never mind next month or next year. Just as Noctifer doesn't mind being in a bear market, he will equally see no advantage in being in a bull market.

And, judging from the number of posters complaining about the work associated with reporting a very large number of trades, there are more than a few day traders playing in the crypto markets.

I dont know any perfect way like people should do what ever trading method there comfortable with i personally haven't got one specific one and am open to all so thats why I think the trading between alts tax is silly. One day I could be trading a coin multiple times, Then I might not trade on the market for dayss. mentioning that you don't ever really own the actual altcoin that you are trading on the site until you withdraw them so does that really count as disposing of an asset. if it is the case we are disposing of assets when trading for another altcoin as iv seen mentioned a few times

Peregrinus

Fakent.ie wrote: »

. . . . Then I might not trade on the market for dayss. mentioning that you don't ever really own the actual altcoin that you are trading on the site until you withdraw them so does that really count as disposing of an asset. if it is the case we are disposing of assets when trading for another altcoin as iv seen mentioned a few times

Yes. If you have a legal right which you can enforce against someone (such as a right to withdraw an altcoin) that right is itself an asset.

A share in a company, after all, is just a right to receive dividends, a right to vote at general meetings, etc. Before any dividend is declared or any general meeting is summoned, do you have an asset? You certainly do.

Fakent.ie

Peregrinus wrote: »

Yes. If you have a legal right which you can enforce against someone (such as a right to withdraw an altcoin) that right is itself an asset.

A share in a company, after all, is just a right to receive dividends, a right to vote at general meetings, etc. Before any dividend is declared or any general meeting is summoned, do you have an asset? You certainly do.

No idea tbh never dealt with stocks or any type of stuff like that before, do you believe that someone who day trades doesn't believe long term bitcoin will be higher then it has been in the past?

Noctifer

Fakent.ie wrote: »

No idea tbh never dealt with stocks or any type of stuff like that before, do you believe that someone who day trades doesn't believe long term bitcoin will be higher then it has been in the past?

I don't. I don't hold crypto unless I have access to the exchange. I just don't trust the market at all. Too much manipulation going on. If someone wealthy enough wants the market to go down, it will go down.

The only thing I believe in is its volatility and that's were I make my money

Fakent.ie

Noctifer wrote: »

I don't. I don't hold crypto unless I have access to the exchange. I just don't trust the market at all. Too much manipulation going on. If someone wealthy enough wants the market to go down, it will go down.

The only thing I believe in is its volatility and that's were I make my money

ok well that explains why you don't want to trade in btc pairs, I believe that it will go higher So I don't mind staying in btc/alts while this is happening

GreeBo

Lads could we keep the day trading pros/cons to a separate thread, this one has a specific topic that we are getting away from?

Noctifer

GreeBo wrote: »

Lads could we keep the day trading pros/cons to a separate thread, this one has a specific topic that we are getting away from?

I agree.

Has anyone actually reported their gains for 2017? I haven't, but I am not a tax resident in that year. Does anyone know any accounting company who has experience with crypto?

GreeBo

Noctifer wrote: »

I agree.

Has anyone actually reported their gains for 2017? I haven't, but I am not a tax resident in that year. Does anyone know any accounting company who has experience with crypto?

Were you tax resident for any of the 2 years prior to 2017?

Noctifer

GreeBo wrote: »

Were you tax resident for any of the 2 years prior to 2017?

I have not lived in Ireland before I moved here in late 2017.

Romanenko

Some thoughts.

1) You own 1 btc

2) You trade this for NEO. And IF this is treated as a taxable event, say you owe $3000 CGT

3) You memorize your private key (lets just say for sake of hypothetical) But then forget it. The NEO is yours but you cannot spend it.
Is this a capital loss? Hopefully, because now you are broke. wtf?

4) 10 years later, you undergo hypnosis and remember your private key. Your NEO is worth $10
million.

5) wtf?

You only ever "own" a crypto to the extent that you control its private key. If you show somebody your private key and they photograph it, they then become the co-owner of your crypto to the extent that they can reproduce your private key.

This is not like a stock, or a house or any other asset.

If you trade BTC for NEO on an exchange, the exchange does not actually assign you a NEO private key so do you really own NEO? they just assign you an IOU so that if you do withdraw your NEO they will then allow you to send a certain amount of NEO from their NEO wallet to one that you control.

Peregrinus

Under Taxes Consolidation Act 1997 s. 538, if your asset is subject to "entire loss, destruction, dissipation or extinction" you can treat that as a disposal. The disposal proceeds will include any insurance, compensation, etc that you may recover, but they may well be nil. This is the section you invoke if, e.g., your asset is stolen, destroyed in a fire, etc.

You'd have to make a submission to the Revenue arguing that you having forgotten you private key amounts to the "entire loss, destruction, dissipation or extinction" of the asset protected by your private key. Unless and until somebody makes such a submission we won't know the outcome, but my guess is that the Revenue would say no, this isn't entire loss because, as your own example points out, the private key is in principle recoverable, even though you may never actually recover it. And at all times you retain the right to take the asset by using the key.

If they did agree to treat your memory lapse as a disposal for nil proceeds then, for consistency, if you subsequently remembered the key and recovered the asset they would treat that as an acquisition for nil cost. So if, the following day, you sold your crytpo for ten million, you'd have a chargeable gain of ten million.

As for you sharing your key with someone else, that in itself is not a disposal any more than if you tell someone they combination of your lock that secures your extremely valuable bike. If he uses the key to take the asset for himself, that's a disposal - either by theft, if he does so without your permission, or by gift, if he does so with your permission.

Fakent.ie

Suprsied there is so little people on here that have cashed out, I'm getting the feeling that anyone who has made a significant amount is long term bullish on bitcoin and doesn't want to cash out yet or is hoping for this to replace fiat soon, Im leaning more in favor of the alt/alt tx Tax is also NOT true anymore I've spoken to a guy who cashed out and the revenue asked some questions as to where the money came from and he said they only wanted bank statements of money going in and then coming out. so that is some good news for us

Noctifer

Fakent.ie wrote: »

Suprsied there is so little people on here that have cashed out, I'm getting the feeling that anyone who has made a significant amount is long term bullish on bitcoin and doesn't want to cash out yet or is hoping for this to replace fiat soon, Im leaning more in favor of the alt/alt tx Tax is also NOT true anymore I've spoken to a guy who cashed out and the revenue asked some questions as to where the money came from and he said they only wanted bank statements of money going in and then coming out. so that is some good news for us

It's similar in my country. Unless the money reaches the bank account it's not considered a profit.

GreeBo

Fakent.ie wrote: »

Suprsied there is so little people on here that have cashed out, I'm getting the feeling that anyone who has made a significant amount is long term bullish on bitcoin and doesn't want to cash out yet or is hoping for this to replace fiat soon, Im leaning more in favor of the alt/alt tx Tax is also NOT true anymore I've spoken to a guy who cashed out and the revenue asked some questions as to where the money came from and he said they only wanted bank statements of money going in and then coming out. so that is some good news for us

If you cash out completely then the intermediate txns are all irrelevant, not just alt - alt.

Intermediate txns are relevant when you dont completely cash out as you have realised a gain.

lifeandtimes

https://irishtechnews.ie/calling-all-new-irish-crypto-millionaires-what-will-your-tax-bill-look-like/

Noctifer

lifeandtimes wrote: »

https://irishtechnews.ie/calling-all-new-irish-crypto-millionaires-what-will-your-tax-bill-look-like/

Unfortunately no information on how exactly calculate the trades.

Flossy Flossy

lifeandtimes wrote: »

https://irishtechnews.ie/calling-all-new-irish-crypto-millionaires-what-will-your-tax-bill-look-like/

Written by a journalism student from DCU.. it's still not guidance from Revenue.

Fakent.ie

GreeBo wrote: »

If you cash out completely then the intermediate txns are all irrelevant, not just alt - alt.

Intermediate txns are relevant when you dont completely cash out as you have realised a gain.

ye but your saying that we owe the revenue tax when we trade between alts at the end of each year aswell even if we don't go to euro

Shamo

lifeandtimes wrote: »

https://irishtechnews.ie/calling-all-new-irish-crypto-millionaires-what-will-your-tax-bill-look-like/

That is a copy and paste from the taxback article I posted at the start of this thread.

I see that the link I posted was since removed but google will find it.

GreeBo

Fakent.ie wrote: »

ye but your saying that we owe the revenue tax when we trade between alts at the end of each year aswell even if we don't go to euro

Yes, because CGT is liable upon disposal.

Until and unless revenue state that crypto to crypto transfers are not categorized as disposals then since crypto currencies are assets, CGT is due.

Romanenko

machiavellianme wrote: »

I took the liberty of contacting revenue due to the constant speculation on here.
Please see below:

Questions:

1. Are cryptocurrency trades subject to tax (or is it considered gambling)?

2. If taxable, is Capital Gains Tax the correct category? I'm not a professional trader.

3. Is the tax calculated at each trade or only when converted back to official currencies like Euro or Dollars etc. i.e. if I swap litecoin for bitcoin, does that count as profit as there is no real profits until the coins are sold to euro?



Responses:

1. & 2. Profits on cryptocurrency trades are subject to Capital Gains Tax

3. The tax due should be calculated when converted to official currencies.

Thankfully a common sense response.

Fakent.ie

The best way to deal with this situation is ring them yourselfs and leave your answers here to see if any of us get different replies to the same questions

Shamo

It would be great if that was the case. I'll see what response I get from Revenue.

Elessar

I just purchased the a pro membership of cointracking.info to help make sense of all the taxes. Have to say it's very detailed and well worth the price. It calculates current unrealised/realised gains/losses and produces a detailed tax report for you. Lots of other excellent reports aswell - gets into the nitty gritty of what you're spending and what you've lost/gained, what percentile you're in against other traders. It also has a similar page to coinmarketcap with price traking for all coins & lots of other interesting charts.

Only thing is finding out exactly what I need to pay taxes on (from Revenue) - I can generate a tax report based on realised gains for all trades but if I only converted some trades to EUR do I need to pay tax just on that, or the whole lot...

Anyone else using it?

Fakent.ie

Elessar wrote: »

I just purchased the a pro membership of cointracking.info to help make sense of all the taxes. Have to say it's very detailed and well worth the price. It calculates current unrealised/realised gains/losses and produces a detailed tax report for you. Lots of other excellent reports aswell - gets into the nitty gritty of what you're spending and what you've lost/gained, what percentile you're in against other traders. It also has a similar page to coinmarketcap with price traking for all coins & lots of other interesting charts.

Only thing is finding out exactly what I need to pay taxes on (from Revenue) - I can generate a tax report based on realised gains for all trades but if I only converted some trades to EUR do I need to pay tax just on that, or the whole lot...

Anyone else using it?

How much was it sounds decent , and best of contacting them yourself we've only had 2 people report of contacting them and both have said pay when coverting to official currencies (euro). but contact yourself to be sure.

barneystinson

Fakent.ie wrote: »

How much was it sounds decent , and best of contacting them yourself we've only had 2 people report of contacting them and both have said pay when coverting to official currencies (euro). but contact yourself to be sure.

Who's the 2? I only saw one..?

Elessar

Fakent.ie wrote: »

How much was it sounds decent , and best of contacting them yourself we've only had 2 people report of contacting them and both have said pay when coverting to official currencies (euro). but contact yourself to be sure.

It was 0.0114 BTC I think, about €112. Not cheap but for the sake of getting the taxes sorted it was worth it. The other features are pretty neat aswell.

Fakent.ie

barneystinson wrote: »

Who's the 2? I only saw one..?

I spoke with one guy offline not actually in here if use dont want to take my word for it thats fine but i know he said it lol maybe i shudnt of worded the last post like that

Fakent.ie

Elessar wrote: »

It was 0.0114 BTC I think, about €112. Not cheap but for the sake of getting the taxes sorted it was worth it. The other features are pretty neat aswell.

and do you know if its accurate you should try work it out yourself see if its on point or not maybe theres some reviews online or something.

Flossy Flossy

Elessar wrote: »

I just purchased the a pro membership of cointracking.info to help make sense of all the taxes. Have to say it's very detailed and well worth the price. It calculates current unrealised/realised gains/losses and produces a detailed tax report for you. Lots of other excellent reports aswell - gets into the nitty gritty of what you're spending and what you've lost/gained, what percentile you're in against other traders. It also has a similar page to coinmarketcap with price traking for all coins & lots of other interesting charts.

Only thing is finding out exactly what I need to pay taxes on (from Revenue) - I can generate a tax report based on realised gains for all trades but if I only converted some trades to EUR do I need to pay tax just on that, or the whole lot...

Anyone else using it?

It doesn't manage Bitfinex margin trading correctly.

Selik

Flossy Flossy wrote:

It doesn't manage Bitfinex margin trading correctly.

Taxes wouldn't normally be due on margin trading as it's considered gambling. Same for spread-betting and CFDs.

Fakent.ie

Selik wrote: »

Taxes wouldn't normally be due on margin trading as it's considered gambling. Same for spread-betting and CFDs.

Where did you see that ? not to question you as if your wrong i'd just like to know

Selik

I thought it was fairly common knowledge that CGT isn't usually due if trading with leverage. The only exception to this would be if trading was your day job.

thegolfer

Selik wrote: »

I thought it was fairly common knowledge that CGT isn't usually due if trading with leverage. The only exception to this would be if trading was your day job.

Wrong. CFD's are taxable under CGT.

https://www.revenue.ie/en/tax-professionals/historic-material/ebrief/2007/no-362007.aspx

Selik

thegolfer wrote:

Wrong. CFD's are taxable under CGT.

I meant spread betting with leverage. My bad I should have been more clear !

D-K

For people who have not reached the Cgt threshold of 1250, do you still have to file a return?

Noctifer

D-K wrote: »

For people who have not reached the Cgt threshold of 1250, do you still have to file a return?

Yes. Even though you don't own them any taxes they could fine you for not reporting it if they would ever audit you.

I know someone who had this happen to them with stock, not crypto.

D-K

Noctifer wrote: »

Yes. Even though you don't own them any taxes they could fine you for not reporting it if they would ever audit you.

I know someone who had this happen to them with stock, not crypto.

Perfect thanks, is it the CG1 form?

lifeandtimes

Just wanted to ask, everyone in this thread is an upstanding citizen and wants to pay their tax.

But just to play devils advocate what is the legal way to "avoid" paying capital gains tax?

If you made say a million before cashing it into a bank account, would you need to leave the state "travelling" for best part of a year for 2 years to technically not be a resident and then come back or because you made the gain while living here it will always be due? Could you lose citizen ship for being gone for that amount of time?

I'm interested in knowing, not that id be arsed going through all that avoid it, I'm ok to pay the 33%

AlmightyCushion

lifeandtimes wrote: »

Just wanted to ask, everyone in this thread is an upstanding citizen and wants to pay their tax.

But just to play devils advocate what is the legal way to "avoid" paying capital gains tax?

If you made say a million before cashing it into a bank account, would you need to leave the state "travelling" for best part of a year for 2 years to technically not be a resident and then come back or because you made the gain while living here it will always be due? Could you lose citizen ship for being gone for that amount of time?

I'm interested in knowing, not that id be arsed going through all that avoid it, I'm ok to pay the 33%

You'd have to leave for 3 years. You wouldn't be able to spend either more than 180 days per year or 280 days every 2 years or you would become resident again. There may be other rules that you would need to look into. If you have maid that much money you should really be asking a tax lawyer/accountant instead of the good people of boards.

barneystinson

Some clarification of their view by HMRC here:
https://www.accountancylive.com/hmrc-clarifies-tax-treatment-cryptocurrencies

Basically confirming that cryptocurrency is treated no different to any other asset or currency.

Also for those balking at the idea of recognising each trade between cryptocurrencies as a disposal, this is no different than trading a holding of yen, for dollars, for Swiss francs, for Aus dollars... each of those trades into a different currency is a disposal of a distinct asset and acquisition of another distinct asset.

Anyone who believes cryptocurrencies ought to be recognised as currencies, is trying to ride two horses at the same time if they also think trades between different currencies should somehow not be viewed as disposals/acquisitions of different assets.

Fakent.ie

barneystinson wrote: »

Some clarification of their view by HMRC here:
https://www.accountancylive.com/hmrc-clarifies-tax-treatment-cryptocurrencies

Basically confirming that cryptocurrency is treated no different to any other asset or currency.

Also for those balking at the idea of recognising each trade between cryptocurrencies as a disposal, this is no different than trading a holding of yen, for dollars, for Swiss francs, for Aus dollars... each of those trades into a different currency is a disposal of a distinct asset and acquisition of another distinct asset.

Anyone who believes cryptocurrencies ought to be recognised as currencies, is trying to ride two horses at the same time if they also think trades between different currencies should somehow not be viewed as disposals/acquisitions of different assets.

thats united kingdom?

are you saying that each trade between cryptos is due tax or not i'm confused with what your saying

AlmightyCushion

Fakent.ie wrote: »

thats united kingdom?

are you saying that each trade between cryptos is due tax or not i'm confused with what your saying

That is what he is saying.

barneystinson

Fakent.ie wrote: »

thats united kingdom?

Yes, where they have similar definitions of things like chargeable assets.

Fakent.ie wrote: »

are you saying that each trade between cryptos is due tax or not i'm confused with what your saying

Yes. In the same way as you would when exchanging currencies, as in my example.