Crypto tax situation - Read post 1 for thread banned users

Bob24

kippy wrote: »

The thing is, most of the things people ask on here are fairly easily "googleable" already in generally more up to date than having to rely on a somewhat static post (that someone needs to update)
What people need to know is pretty much in here:
https://www.revenue.ie/en/companies-and-charities/financial-services/cryptocurrencies/index.aspx
Any posts really are most likely looking for a clarification of what is there or how best to minimise what they pay - , the answers to which vary depending on some variable.

Some more stuff here:
https://www.mooreireland.ie/MediaLibsAndFiles/media/nathansweb.moorestephens.com/Publications/Tax-Treatment-of-Cryptocurrency-Brochure-Web-Final.pdf
https://irishtechnews.ie/crypto-taxes-in-ireland-how-to-prepare/
Maybe stil that link to these three in the OP?

I am always concerned when I see certain questions being asked in here, when there is a lot of information already around the topic out on the net, information that needs to be understood and particulaily if you are serious (about investing in general, not just crypto)

Basically all the above documentation can be summarised in one sentance: crypto is no different from any other financial asset as far as CGT is concerned.

But the big shame is they don't cover all the things which are specific to crypto (i.e. for which there are genuine questions to be asked): staking rewards, airdrops, crypto interest payments and DeFi rewards, etc ...

Revenue really needs to catch-up with these and update their documents. Today I think even the most honest and well documented taxpayer has no way to find clear directions on if and how they are supposed to declare an airdrop on their tax return.

Seve OB

Rob2D wrote: »

Let's change the topic a bit for fun.

How would crypto mining be taxed??

Not that anyone would ever declare it anyway since it's impossible to prove almost. But if they did? Was wondering about it the other day.

Still CGT I would imagine
Not declaring it is tax fraud/ evasion

Bob24

Seve OB wrote: »

Still CGT I would imagine
Not declaring it is tax fraud/ evasion

CGT is only on the price difference between the time you received the mined coin and the time you are disposing of it (i.e. if you minded a BTC when it was worth 10000 and are selling it for 50000, you owe 33% CGT on the 40000 euros worth of capital gain).

But most likely you are also meant to pay a tax on receiving the coin itself (i.e. a fraction of the original 10000 in my previous exemple).

In the case of a business, this is most likely just profit which will be built-into their corporate tax. But for an individual I don't quite know ... it could be considered income and taxed at your marginal rate (same as receiving dividends on company shares), but that is just me guessing and I do't think Revenue's documentation clarifies this.

Seve OB

Bob24 wrote: »

CGT is only on the price difference between the time you received the mined coin and the time you are disposing of it (i.e. if you minded a BTC when it was worth 10000 and are selling it for 50000, you owe 33% CGT on the 40000 euros worth of capital gain).

But most likely you are also meant to pay a tax on receiving the coin itself (i.e. a fraction of the original 10000 in my previous exemple).

In the case of a business, this is most likely just profit which will be built-into their corporate tax. But for an individual I don't quite know ... it could be considered income and taxed at your marginal rate (same as receiving dividends on company shares), but that is just me guessing and I do't think Revenue's documentation clarifies this.

I don’t know enough about mining so forgive me if I’m wrong but if you mine, do you have no capital outlay?

CGT is on your gain & your gain would be 50k

Seve OB

Bob24 wrote: »

Basically all the above documentation can be summarised in one sentance: crypto is no different from any other financial asset as far as CGT is concerned.

But the big shame is they don't cover all the things which are specific to crypto (i.e. for which there are genuine questions to be asked): staking rewards, airdrops, crypto interest payments and DeFi rewards, etc ...

Revenue really needs to catch-up with these and update their documents. Today I think even the most honest and well documented taxpayer has no way to find clear directions on if and how they are supposed to declare an airdrop on their tax return.

Disagree. Take airdrops for example. No different to getting free shares in a company.

Revenue can’t make everything micro specific.

Bob24

Seve OB wrote: »

I don’t know enough about mining so forgive me if I’m wrong but if you mine, do you have no capital outlay?

CGT is on your gain & your gain would be 50k

You have mining costs yes which can probably be offset against the value of the coin you have received.

But when you are receiving the coin as a mining reward it is not a capital gain. It is a payment for a service you have delivered.

A capital gain is when you acquire an asset at a certain price, and then dispose of that same asset at a higher price.

Bob24

Seve OB wrote: »

Disagree. Take airdrops for example. No different to getting free shares in a company.

Revenue can’t make everything micro specific.

If there is a general rule covering this situation, would you have a reference on the Revenue website? Where does it go in a tax return and what tax does apply?

For exemple, for purchases and disposals of crypto, it is clear the generic CGT rules apply which are documented here: https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/index.aspx

What generic rules could be mapped to receiving an airdrop on the Revenue website?

Seve OB

Bob24 wrote: »

If there is a general rule covering this situation, would you have a reference on the Revenue website? Where does it go in a tax return and what tax does apply?

For exemple, for purchases and disposals of crypto, it is clear the generic CGT rules apply which are documented here: https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/index.aspx

What generic rules could be mapped to receiving an airdrop on the Revenue website?

I’m not a tax accountant and am not familiar enough to guide you, nor do I wish to spend ages doing your research. I suggest if you or anyone else cannot complete their own tax return correctly, then you should seek professional guidance from a tax accountant.

kippy

Bob24 wrote: »

If there is a general rule covering this situation, would you have a reference on the Revenue website? Where does it go in a tax return and what tax does apply?

For exemple, for purchases and disposals of crypto, it is clear the generic CGT rules apply which are documented here: https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/index.aspx

What generic rules could be mapped to receiving an airdrop on the Revenue website?

No idea but I'd assume the tax comes into it on disposal of the asset.

Bob24

Seve OB wrote: »

I’m not a tax accountant and am not familiar enough to guide you, nor do I wish to spend ages doing your research. I suggest if you or anyone else cannot complete their own tax return correctly, then you should seek professional guidance from a tax accountant.

This was might point: neither you nor I know what existing tax rule applies to airdrops, if any. And none of the documentation I have seen online or from Revenue addresses that point. This needs to be clarified because it is not clear if it even fits an existing tax rule.

If you expect your average tax advisor to be able to answer this question I think you are very optimistic, they also rely on guidance from Revenue and I am not sure Revenue knows themselves (as it is very much open for interpretation).

Bob24

kippy wrote: »

No idea but I'd assume the tax comes into it on disposal of the asset.

Let me give a real-life scenario some people in Ireland will be facing.

Someone owns whatever amount of XRP tokens (yes, I know I picked a controversial one :-)

This year they will be receiving airdrops of Spark tokens (I believe the airdrops will happen gradually across several months, but say when it they are all completed the person is in possession of Spark tokens which as a whole were valued 2000 euros *at the time they received them*).

Then next year they dispose of those tokens, selling them for 5000 euros (because the price has appreciated).

What is very clear to me is that they have made 3000 euros worth of capital gains (they are selling for 5000 euros something which was worth 2000 euros at the time it came into their possession). And CGT is due on these 3000 euros (minus their yearly CGT allowance of course).

But they probably also need to pay a tax on the fact that they received 2000 euros worth of token in the first place, just because they were XRP holders. And clearly this is not capital gains tax (they didn't make money from the asset appreciating in value: the asset was just given to them). Is it considered interest because they received it in exchange for holding XRP, is it considered an income? Or something else? Frankly I doubt your average tax accountant is able to answer that question as it is very much open for interpretation (and I am not even sure Revenue knows). Which is why I think more guidance is required.

Seve OB

Bob24 wrote: »

This was might point: neither you nor I know what existing tax rule applies to airdrops, if any. And none of the documentation I have seen online or from Revenue addresses that point.

Lots of tax stuff that you or me will not know because we are not professional.

Have you sought professional advice?

Rob2D

Seve OB wrote: »

Lots of tax stuff that you or me will not know because we are not professional.

Have you sought professional advice?

But who do you get it from? Who are these professionals? The Revenue themselves don't even have answers for this stuff. And new things are are being introduced at a rapid pace.

Most accountants I know are over 50 and look to me to explain to them what a Bitcoin even is.

How can we expect any of them to be experts on all aspects of a blockchain? A technology, that in many ways, is still in it's infancy.

kippy

Rob2D wrote: »

But who do you get it from? Who are these professionals? The Revenue themselves don't even have answers for this stuff. And new things are are being introduced at a rapid pace.

Most accountants I know are over 50 and look to me to explain to them what a Bitcoin even is.

How can we expect any of them to be experts on all aspects of a blockchain? A technology, that in many ways, is still in it's infancy.

The technology might be but it's not the technology that is being taxed. It is the individual.
You don't think revenue deal with complex situations on a regular basis?

If the technology becomes a problem guess what happens?

Bob24

Rob2D wrote: »

But who do you get it from? Who are these professionals? The Revenue themselves don't even have answers for this stuff. And new things are are being introduced at a rapid pace.

Exactly. As I was saying, expecting a tax advisor to know what an airdrop is and its tax treatment is probably wishful thinking.

What they have to offer is a good knowledge of our tax laws and years of experience on how to apply them. I of course respect the value of this service.

But for things like this which are open to interpretation because they are new and could fit into different tax buckets, they are relying on guidance from Revenue as much as we do. And Revenue themselves would have to give it some thoughts before forming an opinion and sharing it.

At the end of the day, IMO the value of this thread is two things:
- flag areas where things are crystal clear to help beginners with their tax affairs (i.e. CGT on purchases and disposals, there is full clarity here and clear directions from Revenue)
- identify more complex areas, see if someone can find relevant and credible guidance for everyone’s benefit, and if not at least keep in mind this is an open question

Rob2D

kippy wrote: »

The technology might be but it's not the technology that is being taxed. It is the individual.
You don't think revenue deal with complex situations on a regular basis?

If the technology becomes a problem guess what happens?

But the individual can obfuscate and control that technology if skilled enough.

And if you're suggesting they'll ban any of this I think you're being very naive. Crypto and blockchain is a genie taken out of the bottle. And it's NEVER going back in.

Torrents became a problem once too years ago. But guess how I watched Game of Thrones? Silk Road? There are numerous Dark Net markets now. And you don't need to be a whiz kid to do any of it.

No, this stuff is here to stay and the Revenue better get their act together because they're already getting left behind.

kippy

Rob2D wrote: »

But the individual can obfuscate and control that technology if skilled enough.

And if you're suggesting they'll ban any of this I think you're being very naive. Crypto and blockchain is a genie taken out of the bottle. And it's NEVER going back in.

Torrents became a problem once too years ago. But guess how I watched Game of Thrones? Silk Road? There are numerous Dark Net markets now. And you don't need to be a whiz kid to do any of it.

No, this stuff is here to stay and the Revenue better get their act together because they're already getting left behind.

If thats what you believe. Fair enough.

Bob24

Interesting take on the crypto tax situation here which goes a bit beyond CGT: https://doylekeaney.ie/news/crypto-assets-high-level-irish-tax-considerations/

In particular, it is the only source I have came across which gives a clear opinion on crypto received from staking as well as crypto lending platforms (i.e. interests from Celsius, Nexo, BlockFi, Crypto.com Earn, etc).

“Passive income derived from the staking or lending of crypto-assets would be subject to income tax rather than CGT (similarly to interest income or dividend income from conventional investments).”

Lorne Malvo

Hi folks, just a quick question; If you were to invest an amount of money into BTC, and 6 months later withdraw same amount of fiat back to your bank account. In that 6 months, BTC value doubles and you have same amount of BTC as originally bought left in your wallet. Are you liable for CGT on the fiat back to your bank account, as its the same and not more as originally invested? Many thanks.

namenotavailablE

Yes- you would have a chargeable disposal for CGT (presumably) purposes.
You'd calculate the gain as the difference between the sales proceeds and half of the original cost of the BTC. There's the annual exemption of €1270 to deduct to get the taxable amount.

Lorne Malvo

namenotavailabl wrote: »

Yes- you would have a chargeable disposal for CGT (presumably) purposes.
You'd calculate the gain as the difference between the sales proceeds and half of the original cost of the BTC. There's the annual exemption of €1270 to deduct to get the taxable amount.

thanks

Lorne Malvo

namenotavailabl wrote: »

Yes- you would have a chargeable disposal for CGT (presumably) purposes.
You'd calculate the gain as the difference between the sales proceeds and half of the original cost of the BTC. There's the annual exemption of €1270 to deduct to get the taxable amount.

Surely depositing the same amount back to the bank account would avoid any red flags though?

Mellor

Lorne Malvo wrote: »

Surely depositing the same amount back to the bank account would avoid any red flags though?

No really. As everyone would be aware that during 6 months you can profit on investments.

The flag is raised really once you invest.

Lorne Malvo

Mellor wrote: »

No really. As everyone would be aware that during 6 months you can profit on investments.

The flag is raised really once you invest.

There must be some loopholes to avail of though...legal of course.

namenotavailablE

The situation you outline shows that a gain was made on the sold BTC- you recovered your total investment but still have half of the original BTC. It's that gain which is taxable.

Lorne Malvo

namenotavailabl wrote: »

The situation you outline shows that a gain was made on the sold BTC- you recovered your total investment but still have half of the original BTC. It's that gain which is taxable.

Yea I understood, thanks

Mellor

Lorne Malvo wrote: »

There must be some loopholes to avail of though...legal of course.

At some point during the year. You could withdraw
€1,270 Profit plus the underlying investment. And immediately reinvest it.
That would attract no tax liability. But superficially increases you cost to acquire.

dougal0691

Mellor wrote: »

At some point during the year. You could withdraw
€1,270 Profit plus the underlying investment. And immediately reinvest it.
That would attract no tax liability. But superficially increases you cost to acquire.

you would need to reinvest in something different though? I was told here before that if you cash out to avail of the 1270 allowance per year, that you need to wait 30 days before reinvesting in the same asset?

Lorne Malvo

dougal0691 wrote: »

you would need to reinvest in something different though? I was told here before that if you cash out to avail of the 1270 allowance per year, that you need to wait 30 days before reinvesting in the same asset?

Anyone use Revolut or N26 to transfer fiat as they are essentially offshore?

makeorbrake

Lorne Malvo wrote: »

Anyone use Revolut or N26 to transfer fiat as they are essentially offshore?

You're mistaken.

Mellor

dougal0691 wrote: »

you would need to reinvest in something different though? I was told here before that if you cash out to avail of the 1270 allowance per year, that you need to wait 30 days before reinvesting in the same asset?

No. I don’t believe that’s correct. Gains are assessed on a FIFO (first in first out) basis. In the above there in only one chargeable event.

What you might be confusing it with is that if you buy and sell an asset within 4 weeks. It bypasses the FIFO rule. And any loss is not a simile for offsetting.
But that doesn’t apply to the above.

dougal0691

Mellor wrote: »

No. I don’t believe that’s correct. Gains are assessed on a FIFO (first in first out) basis. In the above there in only one chargeable event.

What you might be confusing it with is that if you buy and sell an asset within 4 weeks. It bypasses the FIFO rule. And any loss is not a simile for offsetting.
But that doesn’t apply to the above.

I went back and found where I was told you had to wait 30 days.
bed and breakfasting is what it's called.
https://www.lifetimefinancial.ie/tax-saving-tips-managing-stocks-shares/#:~:text=%E2%80%9CBed%20%26%20breakfasting%E2%80%9D%20means%20selling,the%20Capital%20Gains%20Tax%20liability.

this would be very risky to do with crypto being so volatile.

Bob24

dougal0691 wrote: »

I went back and found where I was told you had to wait 30 days.
bed and breakfasting is what it's called.
https://www.lifetimefinancial.ie/tax-saving-tips-managing-stocks-shares/#:~:text=%E2%80%9CBed%20%26%20breakfasting%E2%80%9D%20means%20selling,the%20Capital%20Gains%20Tax%20liability.

this would be very risky to do with crypto being so volatile.

I have seen this mentioned in many places as well, but the revenue website and their CGT documentation don’t seem to back it so I am not too sure.

What’s for sure is that what Mellor mentioned does apply. See here under the section “Shares sold within four weeks of acquisition”: https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/selling-or-disposing-of-shares.aspx

This was probably introduced in order to prevent frequent traders from accruing short term losses and offsetting them then against CGT (which is a way to penalise them).

But actually in the context of crypto I think it can sometimes turn to the advantage of the taxpayer.

For exemple, if you are receiving income in crypto from lending, staking, or mining ... as long as you dispose of the crypto within 4 weeks you are overriding the FIFO rule and thus probably saving a lot on CGT (because the cost base to calculate CGT is the price on the day you received that income rather that a probably much lower price from previous purchases you made months or years ago). Note that in this scenario you also need to pay income tax so you are still getting hammered with tax, but at least CGT is rather low.

Mellor

dougal0691 wrote: »

I went back and found where I was told you had to wait 30 days.
bed and breakfasting is what it's called.
https://www.lifetimefinancial.ie/tax-saving-tips-managing-stocks-shares/#:~:text=%E2%80%9CBed%20%26%20breakfasting%E2%80%9D%20means%20selling,the%20Capital%20Gains%20Tax%20liability.

this would be very risky to do with crypto being so volatile.

It is called Bed and Breakfasting.
A rule was introduced to prevent it in the UK. I can find no such rule on Revenue.ie guide to CGT. As far as I can see it’s a valid strategy in Ireland. Open to correction of course, I’m not a tax accountant.

https://www.paylesstax.ie/sale-of-shares-tax-saving-tips/#.W2iJP-DTV-E

The Irish rule is the one I outlined above, which only applies to offsetting losses against gains, and immediately re-purchasing.

Mellor

Bob24 wrote: »

But actually in the context of crypto I think it can sometimes turn to the advantage of the taxpayer.

For exemple, if you are receiving income in crypto from lending, staking, or mining ... as long as you dispose of the crypto within 4 weeks you are overriding the FIFO rule and thus probably saving a lot on CGT

That wouldn’t actually save you anything long term though. If would just delay the CGT until the next year. A you dispose the expensive coins and hold the cheaper ones - thus increased future gains for CGT purposes.

punch bob

I heard that swapping from one coin to another is a taxable event - which is a pain since many cryptos have no trading pair with EUR hence you trade using X/USDT before getting your desired coin. I have traded several using EUR/USDT pair and of course selling USDT right away to get my coin.

Can I not declare it this year and do so when I finally get my profits in EUR? I have sold a bag of crypto with a loss as well. If I skip declaring it this year, will I get penalised for doing so?

Bob24

Mellor wrote: »

That wouldn’t actually save you anything long term though. If would just delay the CGT until the next year. A you dispose the expensive coins and hold the cheaper ones - thus increased future gains for CGT purposes.

Saying the above, you are assuming that crypto will only go up* and that the person will be a tax resident in Ireland forever, which are not minor assumptions (and also even with this assumptions the deferral can be much more than a year if there are no further disposals). For exemple, if someone is going to leave Ireland in a few years and moves to a tax regime with no CGT, lower CGT, or "simple" FIFO based CGT (without the Irish 4 weeks exception), they could actually save on taxes by doing what I mentioned because that Irish tax they have deferred will actually never be due and there will be lower or no tax at all with their new tax residence.

But yes of course, assuming prices goes up and the person remains a tax resident here, this is about tax deferral rather than tax avoidance.

Even in this scenario it is still a nice benefits though (since our crazy high CGT goes a long way into killing compounding effet of investments, any way to delay it is good to take). For exemple, if someone wants to dispose of interests/staking/mining crypto income to spend them in fiat or invest them into another crypto / asset class, it is a good thing that it can be done without crystallising gains on crypto which was purchased years ago at a much lower price, because any tax amount which is deferred can be reinvested in the meantime and generate yield.

* or that if it goes down the investor will necessarily have gains to offset future losses against.

Bob24

punch bob wrote: »

I heard that swapping from one coin to another is a taxable event - which is a pain since many cryptos have no trading pair with EUR hence you trade using X/USDT before getting your desired coin. I have traded several using EUR/USDT pair and of course selling USDT right away to get my coin.

Can I not declare it this year and do so when I finally get my profits in EUR? I have sold a bag of crypto with a loss as well. If I skip declaring it this year, will I get penalised for doing so?

Any crypto swapped for another crypto in 2020 is part of you 2020 CGT liabilities . I.e. it needs to be declared in 2021.

Mellor

Bob24 wrote: »

Saying the above, you are assuming that crypto will only go up* and that the person will be a tax resident in Ireland forever, which are not minor assumptions (and also even with this assumptions the deferral can be much more than a year if there are no further disposals). For exemple, if someone is going to leave Ireland in a few years and moves to a tax regime with no CGT, lower CGT, or "simple" FIFO based CGT (without the Irish 4 weeks exception), they could actually save on taxes by doing what I mentioned because that Irish tax they have deferred will actually never be due and there will be lower or no tax at all with their new tax residence.

But yes of course, assuming prices goes up and the person remains a tax resident here, this is about tax deferral rather than tax avoidance.

The compounding interest point is a valid one. As you can profit on the deferred tax.

Of course all this only applies if you holding, mining, and disposing the same coin.

punch bob wrote: »

.
Can I not declare it this year and do so when I finally get my profits in EUR? I have sold a bag of crypto with a loss as well. If I skip declaring it this year, will I get penalised for doing so?

If you’ve made a loss this year. That can be offset from and profits. Say the loss was €2k and you made €3k profit. You’d definitely want to declare all of that. As the loss combined with the exemption. Means you’d have zero tax liability. And increased your acquisition price for tax purposes.

Rob2D

Bob24 wrote: »

Any crypto swapped for another crypto in 2020 is part of you 2020 CGT liabilities . I.e. it needs to be declared in 2021.

But in terms of just acquiring, you didn't realise any gains from it though??? Like if you bought BTC in order to swap for something else straight away, you didn't gain or lose anything. I was just simply a bridge.

I reckon if you just record it in your portfolio as x amount of €'s for x coin and don't bother mentioning the BTC bridge at all, then the revenue won't ever know or even care.

Bob24

Rob2D wrote: »

But in terms of just acquiring, you didn't realise any gains from it though??? Like if you bought BTC in order to swap for something else straight away, you didn't gain or lose anything. I was just simply a bridge.

I reckon if you just record it in your portfolio as x amount of €'s for x coin and don't bother mentioning the BTC bridge at all, then the revenue won't ever know or even care.

Yes in a the specific scenario whereby you acquire BTC and *immediately* convert that exact amount into another crypto (i.e. the price of BTC hasn't changed between both transactions), you don't have any CGT liability as there was not profi (you are still meant to report that transaction to Revenue though, as even though there was no gain it is a disposal).

However, if we are talking about BTCs which were purchased months or years ago and which are being converted into another crypto today - this would trigger a CGT liability for 2021.

timeToLive

Bob24 wrote: »

Yes in a the specific scenario whereby you acquire BTC and *immediately* convert that exact amount into another crypto (i.e. the price of BTC hasn't changed between both transactions), you don't have any CGT liability as there was not profi (you are still meant to report that transaction to Revenue though, as even though there was no gain it is a disposal).

However, if we are talking about BTCs which were purchased months or years ago and which are being converted into another crypto today - this would trigger a CGT liability for 2021.

EDIT: removing some info in this post as the following two posters have the correct information

Mellor

Rob2D wrote: »

I reckon if you just record it in your portfolio as x amount of €'s for x coin and don't bother mentioning the BTC bridge at all, then the revenue won't ever know or even care.

If you ever get audited, you need to show the actual transactions.

timeToLive wrote: »

And to add to this.. I think* if you bought BTC a year ago and then buy some more BTC and instantly convert it to something else, your tax liability is based on the first bitcoin you bought and the profit from that (FIFO - first in first out)

Nope.

The FIFO rule suspended for assets bought and sold within 28 days. Precisely for that reason.

Bob24

timeToLive wrote: »

And to add to this.. I think* if you bought BTC a year ago and then buy some more BTC and instantly convert it to something else, your tax liability is based on the first bitcoin you bought and the profit from that (FIFO - first in first out)


* I'm not an accountant so could be wrong

As Mellor said, if the same asset is acquired and disposed of within 4 weeks, FIFO does not apply.

See section 6A.3.1 here: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-19/19-04-06a.pdf

So if you buy BTC and instantly convert it to something else (i.e. the BTC price hasn’t had time to change), then you can’t possibly have any CGT liability and your “old” BTC from a year ago still represents a gain to be realised in the future.

timeToLive

Mellor wrote: »

If you ever get audited, you need to show the actual transactions.



Nope.

The FIFO rule suspended for assets bought and sold within 28 days. Precisely for that reason.

Bob24 wrote: »

As Mellor said, if the same asset is acquired and disposed of within 4 weeks, FIFO does not apply.

See section 6A.3.1 here: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-19/19-04-06a.pdf

See if you buy BTC and instantly convert it to something else (i.e. the BTC price hasn’t had time to change), then you can’t possibly have any CGT liability and your “old” BTC from a year ago still represent a gain to be realised in the future.

Thank you!!

jonny_b

If you can't provide receipts say for instance you invested €500 and made a profit of 60k. You knew it was a €500 investment but we're happy to pay the 33% CGT on the €60500. Is that what would generally happen if you can't provide proof?

Donegal1234

jonny_b wrote: »

If you can't provide receipts say for instance you invested €500 and made a profit of 60k. You knew it was a €500 investment but we're happy to pay the 33% CGT on the €60500. Is that what would generally happen if you can't provide proof?

Just use https://koinly.io/ which I use.Recommend by the revenue aswell. Can login with your Coinbase account.

Bob24

jonny_b wrote: »

If you can't provide receipts say for instance you invested €500 and made a profit of 60k. You knew it was a €500 investment but we're happy to pay the 33% CGT on the €60500. Is that what would generally happen if you can't provide proof?

I am not sure at all, but I think they might have a problem as if you are selling 60000 worth of BTC but can’t prove when/how you obtained it, they could suspect that you’re involved in money laundering or that you received the BTC as a way to dodge other taxes (for exemple income tax or VAT - someone could have handed those BTC to you 2 weeks ago as a payment for some job you did for them and behind the back of the taxman).

I assume that if you are engaging with them and being upfront they’ll figure out something though.

jonny_b

Bob24 wrote: »

I am not sure at all, but I think they might have a problem as if you are selling 60000 worth of BTC but can’t prove when/how you obtained it, they could suspect that you’re involved in money laundering or that you received the BTC as a way to dodge other taxes (for exemple income tax or VAT - someone could have handed those BTC to you 2 weeks ago as a payment for some job you did for them and behind the back of the taxman).

I assume that if you are engaging with them and being upfront they’ll figure out something though.

Nah I used koinly there thank OP. No CGT liable well at least not yet. That was just an example I used. Waiting for theta to rise to be liable for CGT lol

Mellor

jonny_b wrote: »

If you can't provide receipts say for instance you invested €500 and made a profit of 60k. You knew it was a €500 investment but we're happy to pay the 33% CGT on the €60500. Is that what would generally happen if you can't provide proof?

If you couldn't prove it wasn't just sent to you or inherited somehow.
Then you might have to declare there lot as a gain.
20,000 vrs 20,165 owing. I wouldn't be spending too much of my time fighting it