Re:Coinbase Ordered to Turn Over Identities of 14,355 Crypto...
by yebyen on Thursday November 30, 2017 @03:57PM
(#15819458)
That's a great question, it seems you're not "converting" the coin if you don't have to lose the original BTC.
I think you'd treat it as found money (income, but at what value? it would be really hard to say what the value is on Day 1 of the hard fork, but you could go by what the markets said it was worth... or do you use the value of the BCH from when you first "claimed" it and moved it to a BCH address? or use the value it had when you first sold it? what if you were holding BTC at the time of the fork but never claimed your BCH, do you have any way to prove that? Do you need to?)
Then once you transact it just once, it should be easy, same question as any other crypto currency; you pay capital gains on the appreciated value (the gains) after you sell. But what is your "cost basis" in that calculation?
I don't want to overpay taxes, but I think the safest thing to do would be to treat that first sale as pure income and pay the regular marginal income tax rate on the full value, because truly you'd actually have no cost basis until you had actually bought some BCH.
I think you'd treat it as found money (income, but at what value? it would be really hard to say what the value is on Day 1 of the hard fork, but you could go by what the markets said it was worth... or do you use the value of the BCH from when you first "claimed" it and moved it to a BCH address? or use the value it had when you first sold it? what if you were holding BTC at the time of the fork but never claimed your BCH, do you have any way to prove that? Do you need to?)
Then once you transact it just once, it should be easy, same question as any other crypto currency; you pay capital gains on the appreciated value (the gains) after you sell. But what is your "cost basis" in that calculation?
I don't want to overpay taxes, but I think the safest thing to do would be to treat that first sale as pure income and pay the regular marginal income tax rate on the full value, because truly you'd actually have no cost basis until you had actually bought some BCH.