Coinbase Ordered to Turn Over Identities of 14,355 Crypto Traders to the IRS

Re:Coinbase Ordered to Turn Over Identities of 14,355 Crypto... by cortesoft on Thursday November 30, 2017 @01:03PM (#15817908)

Taxes are paid in dollars, so when your dollars change value because of inflation or deflation, your taxes will go up or down by the same amount because they are being paid in the same currency. A dollar can never inflate or deflate relative to itself.

You seem to be trying to make the analogy of bitcoin being a currency, so a better comparison would be to look at tax law for foreign currencies. Luckily, the IRS puts out documents about that very thing: https://www.irs.gov/pub/int_practice_units/fcu_cu_c_18_2_1_0...

Now, whether bitcoin is a currency or an asset is not fully settled, although the IRS treats it as an asset, not a currency: https://www.irs.gov/newsroom/irs-virtual-currency-guidance

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Re:Coinbase Ordered to Turn Over Identities of 14,355 Crypto... by SonicSoul on Thursday November 30, 2017 @01:21PM (#15818103)

I agree, so i think a good analogy would be, you buy a tractor and hold it and for whatever reason that tractor gains value, and you exchange it for a boat next year. At what point do you pay capital gains on that tractor? (it's not a currency, but you're using an asset like a currency)

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Re:Coinbase Ordered to Turn Over Identities of 14,355 Crypto... by rosser on Thursday November 30, 2017 @01:34PM (#15818230)

If the tractor sells for more than you paid for it — or, in your specific example, the boat you traded it for is worth a larger number of dollars than you paid for the tractor, at the time of the trade — then yes; that is the very definition of "capital gains".

Just because the gain isn't in actual dollars, doesn't mean there wasn't a gain. If the gain is somehow denominable in, or reducible to, a number of dollars, then for tax purposes it is a gain.

You realize those gains at the time of the sale or trade. That's when they're taxable.

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Re:Coinbase Ordered to Turn Over Identities of 14,355 Crypto... by cortesoft on Thursday November 30, 2017 @01:30PM (#15818190)

For most assets, you only pay taxes on the gains when you sell the asset. If you buy stocks, for example, you only pay capital gains if you sell the stock.

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