If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

Re:If Bitcoin Looks Like It Isn’t Trading, It’s Because It I... by modeless on Monday December 09, 2019 @08:18PM (#21748694)

There's a gigantic difference: an exemption for almost all personal transactions. In practice almost every foreign currency transaction you make is exempt[1]. The IRS doesn't allow that exemption for Bitcoin and technically you are required to calculate and report gains for every single Bitcoin transaction you make (regardless of whether dollars are involved). Imagine reporting every Starbucks purchase on your tax return. It's a completely unreasonable burden for a currency.

[1] The actual rule is $200 of capital gains per transaction, and you'd usually have to spend substantially more than $1000 in a single transaction to get there.

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Re:If Bitcoin Looks Like It Isn’t Trading, It’s Because It I... by paulddraper on Wednesday December 11, 2019 @12:47PM (#21764848)

No, the $200 limit is the limit on the exchanges for the year.

EUR/USD exchange rate changed 3-4% from a year ago, so spending $5-6k in Euros would surpass the threshold (though in this particular case, as a loss).

The BTC/USD exchange rate more than doubled over the past year, so you'd have to spend less than a few hundred dollars to remain under <$200 gains.

The $200 tax exemption would make little practical difference. Even for traditional stable currencies, it's relatively easy to exceed that in any significant use. And with BTC's historical volatility, it's virtually guaranteed.

[ Parent | on HN ]