Re:The IRS Sets a Trap for Cryptocurrency Tax Cheats
by vmception on Saturday September 26, 2020 @01:32PM
(#24600558)
Lenders have been doing great lending against btc and other digital assets. They all set up systems to immediately liquidate the borrower and also sell the asset (or hedge against it).
Its the borrower that amplifies their risk.
But if a borrower collateralizes well enough it is much more tax efficient for them.
These are solved problems for 2 years.
And yes, that is an additional example about why assuming there is a capital gain or loss merely from seeing the flow of crypto through a Coinbase account is misguided.
Could be just a tax deductible interest payment to service a business debt in a sole proprietorship. Its simply not up to Coinbase to determine or the IRS to assume either.
Coinbase is getting better about it if you use their own products for staking and earning. (1099-Misc, 1099-K). But they are still doing it wrong for people that use crypto properly and keep personal off-exchange custody of assets.
Its the borrower that amplifies their risk.
But if a borrower collateralizes well enough it is much more tax efficient for them.
These are solved problems for 2 years.
And yes, that is an additional example about why assuming there is a capital gain or loss merely from seeing the flow of crypto through a Coinbase account is misguided.
Could be just a tax deductible interest payment to service a business debt in a sole proprietorship. Its simply not up to Coinbase to determine or the IRS to assume either.
Coinbase is getting better about it if you use their own products for staking and earning. (1099-Misc, 1099-K). But they are still doing it wrong for people that use crypto properly and keep personal off-exchange custody of assets.