Here is the thing we are overlooking. The darker side of the cloud being that a precedent has been set. There are bunch out there mistakenly relieved that they bought their BTC in 2016, 2017 etc. This is actually a big win for the IRS as they just got their foot in the door. That said everyone in the last two years that meets the criteria should likewise expect their information to be handed over at some point.
This time; however, Coinbase won't put up nearly as hard a fight, if at all as there is now a legal precedent and they no it is a losing battle. Also I think we have failed to estimate the ramifications if the initial Suspicions by the IRS are confirmed. We know they will be based upon the initial BTC user base, the ease of avoiding taxes during that time etc. Ergo the IRS will have a hell of a lot more foundation to their next request based on provable evasive tax information obtained in this initial lot of customers Coinbase will be handing over.
That in turn will allow them more power to start prying into all things Crypto. @pawsdog
It will be more than half..lol.. If they find you failed to pay X number of years ago, they will calculate what you owed with an interest rate that would rival that of a loan shark.
When you pay your taxes late, the IRS charges interest on any unpaid amount. The interest compounds daily from the due date of the return until the date you pay in full. ... The interest rate charged by the IRS is the federal short-term rate plus 3%.
Basically if you failed to pay the $1000 in 2014 you owe some ridiculous number like $1700 now. So you owe what you owed, plus another 70 percent.
You don't have any "GAINS" until you sell. Up until you sell you only have paper profits. Any GAIN you make on any trade is taxable at the time that you sell. So if you bought $1000 of BTC in 2010 and are sitting on hundreds of millions in paper profits you don't owe either government anything until you sell. As your Canadian I don't think you would owe the US anything if you sold, only Cananda. Unless you are a US citizen living in Canada in which Case both governments may want some money.
Wow just looked that up.. what a mess..
Generally, as a U.S. citizen living and working in Canada, you are taxed for money earned in Canada, whether from employment with a company operating in Canada, or investment interest from Canadian stocks, bonds or mutual funds,” says Brent Allen, certified financial planner and financial management adviser with Investors Group in London, Ontario.
So did you earn the money in Canada or the US.. Bitcoin is without borders.. so that's interesting.
I don't ever plan on cashing out my cryptos ... hoping I can someday buy food with it on Amazon.com --- How do I pay taxes when I buy a banana on Amazon with Steem ?
I don't think Amazon will take STEEM.. lol.. but in the event you buy something with BTC that purchase becomes taxable, as well as any gains on the BTC up. As you are looking at it wrong.. You did not buy a banana, you just sold your Crypto for a Banana that is valued at a number in Fiat. So if I bought a CAR with BTC.. I'm still taxable on the car and the gain on the BTC as I just sold my BTC to someone else in exchange for a car.
So if I have gains of $1,000 a year do I pay taxes on those gains if i don't sell ? What happens if Bitcoin goes to zero - Do they give me those taxes back ?
Nope, because you had a profit when you sold.. If it goes to 0 after you sell.. makes no difference.. It's only taxable based on it's price at the time you sell.
Here is the thing we are overlooking. The darker side of the cloud being that a precedent has been set. There are bunch out there mistakenly relieved that they bought their BTC in 2016, 2017 etc. This is actually a big win for the IRS as they just got their foot in the door. That said everyone in the last two years that meets the criteria should likewise expect their information to be handed over at some point.
This time; however, Coinbase won't put up nearly as hard a fight, if at all as there is now a legal precedent and they no it is a losing battle. Also I think we have failed to estimate the ramifications if the initial Suspicions by the IRS are confirmed. We know they will be based upon the initial BTC user base, the ease of avoiding taxes during that time etc. Ergo the IRS will have a hell of a lot more foundation to their next request based on provable evasive tax information obtained in this initial lot of customers Coinbase will be handing over.
That in turn will allow them more power to start prying into all things Crypto. @pawsdog
If I make 1,000 % on Bitcoin I won't mind paying 1/2 to the Government
It will be more than half..lol.. If they find you failed to pay X number of years ago, they will calculate what you owed with an interest rate that would rival that of a loan shark.
When you pay your taxes late, the IRS charges interest on any unpaid amount. The interest compounds daily from the due date of the return until the date you pay in full. ... The interest rate charged by the IRS is the federal short-term rate plus 3%.
Basically if you failed to pay the $1000 in 2014 you owe some ridiculous number like $1700 now. So you owe what you owed, plus another 70 percent.
https://www.irscalculators.com/irs-penalty-calculator.php
@pawsdog
I am in Canada and cannot even withdraw anything from Coinbase. Do I still need to pay the IRS ?
I bought $50 in June 2017 (6 months ago) .... Do I have to pay taxes in Canada or USA for gains even if i don't cash out ?
You don't have any "GAINS" until you sell. Up until you sell you only have paper profits. Any GAIN you make on any trade is taxable at the time that you sell. So if you bought $1000 of BTC in 2010 and are sitting on hundreds of millions in paper profits you don't owe either government anything until you sell. As your Canadian I don't think you would owe the US anything if you sold, only Cananda. Unless you are a US citizen living in Canada in which Case both governments may want some money.
Wow just looked that up.. what a mess..
Generally, as a U.S. citizen living and working in Canada, you are taxed for money earned in Canada, whether from employment with a company operating in Canada, or investment interest from Canadian stocks, bonds or mutual funds,” says Brent Allen, certified financial planner and financial management adviser with Investors Group in London, Ontario.
So did you earn the money in Canada or the US.. Bitcoin is without borders.. so that's interesting.
I am a Canadian living in Canada. I only invested $50 in Bitcoin but have made some extra Free Bitcoin and Steem Dollars with Earn crypto
What happens when I sell my Steem Dollars (SBD) for Steem and earn 100 % but leave it all in Steemit ?
Still paper profits, so they don't count I would think.. No crypto counts until you convert is to FIAT
I don't ever plan on cashing out my cryptos ... hoping I can someday buy food with it on Amazon.com --- How do I pay taxes when I buy a banana on Amazon with Steem ?
I don't think Amazon will take STEEM.. lol.. but in the event you buy something with BTC that purchase becomes taxable, as well as any gains on the BTC up. As you are looking at it wrong.. You did not buy a banana, you just sold your Crypto for a Banana that is valued at a number in Fiat. So if I bought a CAR with BTC.. I'm still taxable on the car and the gain on the BTC as I just sold my BTC to someone else in exchange for a car.
So if I have gains of $1,000 a year do I pay taxes on those gains if i don't sell ? What happens if Bitcoin goes to zero - Do they give me those taxes back ?
Nope, because you had a profit when you sold.. If it goes to 0 after you sell.. makes no difference.. It's only taxable based on it's price at the time you sell.
I don't need to be rich - I just want to feel rich. I never plan on selling my Bitcoin.
good plan... :)
What happens if i never sell ?