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A comment on If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t. Parent comment

Re:If Bitcoin Looks Like It Isn’t Trading, It’s Because It I... by cwkoss on Monday December 09, 2019 @06:15PM (#21747728)
I am not an accountant and may be wrong, but if a US citizen exchanges $1000 USD to euro, and then euro appreciates 10%, and then they spend that euro to make a purchase, I was under the impression that that purchase is not subject to capital gains. Exchanging back to USD would be, but I thought currency classification exempted cap gains on purchases of goods and services.

Am I wrong? Have never held any significant amount of foreign currency, so have never dealt with this personally.

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Re:If Bitcoin Looks Like It Isn’t Trading, It’s Because It I... by paulddraper on Monday December 09, 2019 @06:22PM (#21747780)
My understanding is that a gain or loss in that currency is recognized upon spending/trading it.

Quick search brought me to https://thismatter.com/money/tax/foreign-currency-transactio... which agrees with that.

Like use tax, I suspect it is often just neglected.

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Re:If Bitcoin Looks Like It Isn’t Trading, It’s Because It I... by cwkoss on Monday December 09, 2019 @06:42PM (#21747950)
Interesting, thanks for correcting me.

It looks like there may be an exemption for small amounts under $200 (https://smallbusiness.chron.com/foreign-currency-exchange-ta...), which would make Bitcoin much more functional (if it would apply to Bitcoin anyways, mute point as BTC is classified as an asset), but not to the extent of my misconception.

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Re:If Bitcoin Looks Like It Isn’t Trading, It’s Because It I... by xur17 on Monday December 09, 2019 @08:02PM (#21748585)
The lack of a de minimis exemption for bitcoin is key here, and a major way in which it's not treated like a foreign currency.
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Re:If Bitcoin Looks Like It Isn’t Trading, It’s Because It I... by solotronics on Monday December 09, 2019 @09:50PM (#21749176)
Yeah there is specific tax code for gains on foreign currency. It is actually worse than capital gains tax. https://smallbusiness.chron.com/irs-tax-laws-regarding-forei...
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