They are always after collecting that money... there is no sector that the IRS and our government won't try to sniff out to grab a piece of OUR pie.
If you are simply holding crypto it is considered property of yours and you do not have to claim anything but need to keep record of what you invested.
If and when you decide to convert it back to fiat currency that is when you will need to fill out some type of form to pay tax on it at the end of the year because it has become an "income".
Best advice, talk to an accountant about your crypto holdings lol.
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Just like gold or silver bullion, you pay the taxes after cashing in..
So what happens when we use the crypto to actually buy something,
without transferring to a fiat based currency?
That's the beauty of crypto... it is untraceable 😉
Well it can be @crypto2day, but for semi-tech-savvy individuals like me, it isn't. I don't have the know-how or the time to make it so. Most would-be users don't either.
well, that's why certain crypto coins have made privacy/anonymity a core part of their focus. If you care about your freedom, then you might consider holding those coins and not holding bankster coins.
I spoke to an accountant friend of mine (this should not be considered tax advice, get your own accountant and pay them for theirs), and she told me that any time you either exchange for another good (like another crypto or something off Amazon) or for government fiat, you have to claim any capital gains at that time. It will get very complex very quickly if you have a lot of churn. Yes, the IRS really expects you to do this. On what level they decide to enforce this is anyone's guess.
Interesting, considering a Trader does this all day for a living..
Most trading platforms will calculate this stuff for you and send you a 1099 but if you're doing this trading outside of something like that you'll have to come up with another solution.