Re:Crypto crash deepens, stocks slip
by nostrademons on Wednesday May 19, 2021 @12:22PM
(#27210773)
If the trader is being honest, converting cryptocurrencies to stablecoins is a taxable event triggering capital gains. The IRS considers any exchange of one cryptocurrency for another to be a sale of a capital asset and purchase of another.
[ Parent
| on HN ]
Yes. They are assets and you must pay tax every time you swap them or even use them to make a purchase. It's like making a purchase with Apple stock or swapping Apple stock for Google stock. Pay tax.
How will the government track and get their dues?
Typically they use account information from the exchanges and follow that onchain
But they generally rely on individuals to report accurately. Obviously wage-earners arent used to that as their employers withhold money for taxes and report to the IRS so this crowd may find this new found freedom to be foreign and a chance to “get away with” something, but everyone else has lived in a world where they report their taxes voluntarily and accurately