Can we pool our knowledge regarding TAX and crypto and make some kind of FAQ/sticky?

Fakent.ie

Peregrinus wrote: »

The chargeable gain is 75 euros.

But this is for just a single transaction. The picture is more complicated if you have more than one transaction for the year. Consider the following transactions:

Buy 10 Crypto A for 1,000, plus fee 25.
Buy 10 Crypto B for 200 plus fee 5.
Buy 10 Crypto C for 5,000 plus fee 125.
Sell 5 Crypto C for 7,500, no fee.
Sell 5 Crypto B for 100, no fee.

If you simply sum all the fees you paid during the year, they come to 155. But the bulk of that was not incurred in connection with the crypto that you sold. In calculating your capital gains, you can only deduct the expenses which relate to the assets you disposed of. Your calculation of chargeable gains is as follows:

Sold 5 Crypto C:
Acquisition cost 2,500 plus fee 62.50 = 2,562.50
Disposal proceeds 7,500
Chargeable capital gain: 4,937.50

Sold 5 Crypto B:
Acquisition cost 100 plus fee 2.50 = 102.50
Disposal proceeds 100
Deductible capital loss: 2.50

Chargeable gain less deductible loss: 4,935

So how would I go about trade fees on binance and withdraw and deposit fees when paying tax

NewApproach

Fakent.ie wrote: »

So how would I go about trade fees on binance and withdraw and deposit fees when paying tax

Get the Euro equivalent of the fees you pay, each time you pay them, and deduct them from proceeds or add them to costs as appropriate.

GreeBo

Noctifer wrote: »

My trades are buy and then sell of the same crypto. During a day I buy one crypto and in the same day I dispose of it. Some days I do this multiple times.

If I understand you correctly I add the fee to my initial purchase, so when I buy 1 btc for 10000 I add the 25 fee and that makes it as if I bought it with 10025.

What if I sell it with a fee. Let's say I sell 1 btc for 10100 and pay a fee of 25.25

so you are only buying coins that are traded with fiat?

Noctifer

GreeBo wrote: »

so you are only buying coins that are traded with fiat?

Yes. I sometimes do LTC/ETH -> BTC -> euro but that's only a small number of my trades. Most trades are crypto/euro pairs.

Cryptonovice

Fakent.ie wrote: »

Did they get back to you yet?

No nothing yet unfortunately..I am awaiting with great anticipation though!

.G.

I've sent off my own query to them now too. My questions very much along the lines that were asked of them by machiavellianme so I'm very interested to see if the answers come back the same.

Radsky

Fakent.ie wrote: »

Noctifer wrote: »

No Euro pairs though, not interested.

its better to trade in bitcoin pairs, if you would like to know why dm me because I don't want to write about it in here its really off-topic

I’d like to get your insights on this. What i have seen is that when the price of btc goes down, the price of the other pair also goes down (and vice versa). This reduces the gains that can be realized from trading in bitcoin pairs vs. trading in euro pairs as the euro is less volatile. The only drawback is that there are only very few euro pairs.

Fakent.ie

Radsky wrote: »

I’d like to get your insights on this. What i have seen is that when the price of btc goes down, the price of the other pair also goes down (and vice versa). This reduces the gains that can be realized from trading in bitcoin pairs vs. trading in euro pairs as the euro is less volatile. The only drawback is that there are only very few euro pairs.

If you believe that btc at one point in the future will be worth more then it is right now, you should trade in btc pairs and try to accumulate more btc then what you had before, and not euro even if you don't make more euro in that current trade and only more btc in a few weeks for example, if btc was to go back to 20k then any btc that you accumulated now would have doubled in euro value. The cheaper alts have a lot more chances of having a higher positive increase in price as to bitcoin or something else thats higher up in price. the idea and technology behind cryptocurrencies is to end the bad fiat system we have which is only getting worse over time, another reason is to not have the govt knowing what your doing 24/7 either, some people are gonna be angry i said that in here i feel. you could also do this strategy with the ETH pairs as there are a lot more of those compared to other pairs and then you could use that ether for ico's I think eventually ether will break away from btc and not be so heavily controlled price wise but so you know iv heard that 90% of the coins "follow" bitcoin I've noticed this with some coins myself with a lot. but with all the talk of being taxed on each tx and keeping track of it I wouldn't even bother trading

Radsky

I get this but if you were to do daily trading, then it does not matter what the price of btc or other atlcoins would be in the future. What matters more is the price movement of the coin relative to the other trading pair.

Fakent.ie

Radsky wrote: »

I get this but if you were to do daily trading, then it does not matter what the price of btc or other atlcoins would be in the future. What matters more is the price movement of the coin relative to the other trading pair.

You'll have more bitcoin that will me worth more in a couple weeks. so unless you feel as if you can out trade bitcoins growth % and then buy more bitcoin with your euro you shouldn't be doing that

bitcoin went from 1000 to 13,5000 in the calendar year that is 1250% increase for the year. daily that is 3.5% daily on average so you would of needing to make that same % every day for the last year to keep up with it. we cant really say bitcoins going up from here but you shouldn't invest I guess if you don't believe in it

are you going back to fiat every day?

Radsky

That is what I plan to do. I have been trading Eth and other altcoin pairs but have not seen any gains. You are at the mercy of the price change of both coins whereas trading in fiat you only need to consider the price change in one coin. I will see in 2 weeks if this will be more profitable.

Fakent.ie

Radsky wrote: »

That is what I plan to do. I have been trading Eth and other altcoin pairs but have not seen any gains. You are at the mercy of the price change of both coins whereas trading in fiat you only need to consider the price change in one coin. I will see in 2 weeks if this will be more profitable.

I don't know if you realized but right now we are in a "bear market" its very very difficult right now to make any profit. right now I wouldn't trade at all I haven't actually in the last 1/2 weeks because of this I would recommend not either but when we get out of this, we will see a lot of alts growing. What coins are you trading with?

Halflifept

It was recommended previously but www.cointracking.info looks like does the job for taxes with FIFO. Its just import the .CVS taken from the exchanges/wallets.
It does a free report for a limited number of trades..limiting the time frame might help as a workaround.
Otherwise this really looks like a big pain in the hoop to do in an excel spreadsheet when you start playing with multiple exchanges / coins.

Noctifer

Fakent.ie wrote: »

I don't know if you realized but right now we are in a "bear market" its very very difficult right now to make any profit. right now I wouldn't trade at all I haven't actually in the last 1/2 weeks because of this I would recommend not either but when we get out of this, we will see a lot of alts growing. What coins are you trading with?

That's why I like day trading. Even though we are in a bear market I still manage to make gains on a daily basis. And the fact that I am in fiat most the time I can sleep soundly without worries that a good chunk of my investment is gone over night.

Fakent.ie

Noctifer wrote: »

That's why I like day trading. Even though we are in a bear market I still manage to make gains on a daily basis. And the fact that I am in fiat most the time I can sleep soundly without worries that a good chunk of my investment is gone over night.

at some point we won't be in a bear market being in fiat you need to judge when that bounce will be which wont be easy, you could buy back in at 13k and it drop back to 9k, always being in bitcoin and going on the "fact" that long term it will go up means that accumulating more now you'll just be better off in the future this way you'll have more btc so you don't ever need to judge that bounce either, that is if you are long term bullish on btc

if you have 10k and make 12k when bitcoin is 11k right now then bitcoin when your not looking suddenly jumps to 15k then your gona have to buy in at a much higher price,


Whats wrong with daily trading and leaving your money in bitcoin?

Peregrinus

Fakent.ie wrote: »

at some point we won't be in a bear market being in fiat you need to judge when that bounce will be which wont be easy, the other way you'll have more btc so you don't ever need to judge that, that is if you are long term bullish on btc

Day traders, by definition, are not taking a long term view. A day trader literally does not care what the price of the asset will be tomorrow, never mind next month or next year. Just as Noctifer doesn't mind being in a bear market, he will equally see no advantage in being in a bull market.

And, judging from the number of posters complaining about the work associated with reporting a very large number of trades, there are more than a few day traders playing in the crypto markets.

Fakent.ie

Peregrinus wrote: »

Day traders, by definition, are not taking a long term view. A day trader literally does not care what the price of the asset will be tomorrow, never mind next month or next year. Just as Noctifer doesn't mind being in a bear market, he will equally see no advantage in being in a bull market.

And, judging from the number of posters complaining about the work associated with reporting a very large number of trades, there are more than a few day traders playing in the crypto markets.

I dont know any perfect way like people should do what ever trading method there comfortable with i personally haven't got one specific one and am open to all so thats why I think the trading between alts tax is silly. One day I could be trading a coin multiple times, Then I might not trade on the market for dayss. mentioning that you don't ever really own the actual altcoin that you are trading on the site until you withdraw them so does that really count as disposing of an asset. if it is the case we are disposing of assets when trading for another altcoin as iv seen mentioned a few times

Peregrinus

Fakent.ie wrote: »

. . . . Then I might not trade on the market for dayss. mentioning that you don't ever really own the actual altcoin that you are trading on the site until you withdraw them so does that really count as disposing of an asset. if it is the case we are disposing of assets when trading for another altcoin as iv seen mentioned a few times

Yes. If you have a legal right which you can enforce against someone (such as a right to withdraw an altcoin) that right is itself an asset.

A share in a company, after all, is just a right to receive dividends, a right to vote at general meetings, etc. Before any dividend is declared or any general meeting is summoned, do you have an asset? You certainly do.

Fakent.ie

Peregrinus wrote: »

Yes. If you have a legal right which you can enforce against someone (such as a right to withdraw an altcoin) that right is itself an asset.

A share in a company, after all, is just a right to receive dividends, a right to vote at general meetings, etc. Before any dividend is declared or any general meeting is summoned, do you have an asset? You certainly do.

No idea tbh never dealt with stocks or any type of stuff like that before, do you believe that someone who day trades doesn't believe long term bitcoin will be higher then it has been in the past?

Noctifer

Fakent.ie wrote: »

No idea tbh never dealt with stocks or any type of stuff like that before, do you believe that someone who day trades doesn't believe long term bitcoin will be higher then it has been in the past?

I don't. I don't hold crypto unless I have access to the exchange. I just don't trust the market at all. Too much manipulation going on. If someone wealthy enough wants the market to go down, it will go down.

The only thing I believe in is its volatility and that's were I make my money

Fakent.ie

Noctifer wrote: »

I don't. I don't hold crypto unless I have access to the exchange. I just don't trust the market at all. Too much manipulation going on. If someone wealthy enough wants the market to go down, it will go down.

The only thing I believe in is its volatility and that's were I make my money

ok well that explains why you don't want to trade in btc pairs, I believe that it will go higher So I don't mind staying in btc/alts while this is happening

GreeBo

Lads could we keep the day trading pros/cons to a separate thread, this one has a specific topic that we are getting away from?

Noctifer

GreeBo wrote: »

Lads could we keep the day trading pros/cons to a separate thread, this one has a specific topic that we are getting away from?

I agree.

Has anyone actually reported their gains for 2017? I haven't, but I am not a tax resident in that year. Does anyone know any accounting company who has experience with crypto?

GreeBo

Noctifer wrote: »

I agree.

Has anyone actually reported their gains for 2017? I haven't, but I am not a tax resident in that year. Does anyone know any accounting company who has experience with crypto?

Were you tax resident for any of the 2 years prior to 2017?

Noctifer

GreeBo wrote: »

Were you tax resident for any of the 2 years prior to 2017?

I have not lived in Ireland before I moved here in late 2017.

Romanenko

Some thoughts.

1) You own 1 btc

2) You trade this for NEO. And IF this is treated as a taxable event, say you owe $3000 CGT

3) You memorize your private key (lets just say for sake of hypothetical) But then forget it. The NEO is yours but you cannot spend it.
Is this a capital loss? Hopefully, because now you are broke. wtf?

4) 10 years later, you undergo hypnosis and remember your private key. Your NEO is worth $10
million.

5) wtf?

You only ever "own" a crypto to the extent that you control its private key. If you show somebody your private key and they photograph it, they then become the co-owner of your crypto to the extent that they can reproduce your private key.

This is not like a stock, or a house or any other asset.

If you trade BTC for NEO on an exchange, the exchange does not actually assign you a NEO private key so do you really own NEO? they just assign you an IOU so that if you do withdraw your NEO they will then allow you to send a certain amount of NEO from their NEO wallet to one that you control.

Peregrinus

Under Taxes Consolidation Act 1997 s. 538, if your asset is subject to "entire loss, destruction, dissipation or extinction" you can treat that as a disposal. The disposal proceeds will include any insurance, compensation, etc that you may recover, but they may well be nil. This is the section you invoke if, e.g., your asset is stolen, destroyed in a fire, etc.

You'd have to make a submission to the Revenue arguing that you having forgotten you private key amounts to the "entire loss, destruction, dissipation or extinction" of the asset protected by your private key. Unless and until somebody makes such a submission we won't know the outcome, but my guess is that the Revenue would say no, this isn't entire loss because, as your own example points out, the private key is in principle recoverable, even though you may never actually recover it. And at all times you retain the right to take the asset by using the key.

If they did agree to treat your memory lapse as a disposal for nil proceeds then, for consistency, if you subsequently remembered the key and recovered the asset they would treat that as an acquisition for nil cost. So if, the following day, you sold your crytpo for ten million, you'd have a chargeable gain of ten million.

As for you sharing your key with someone else, that in itself is not a disposal any more than if you tell someone they combination of your lock that secures your extremely valuable bike. If he uses the key to take the asset for himself, that's a disposal - either by theft, if he does so without your permission, or by gift, if he does so with your permission.

Fakent.ie

Suprsied there is so little people on here that have cashed out, I'm getting the feeling that anyone who has made a significant amount is long term bullish on bitcoin and doesn't want to cash out yet or is hoping for this to replace fiat soon, Im leaning more in favor of the alt/alt tx Tax is also NOT true anymore I've spoken to a guy who cashed out and the revenue asked some questions as to where the money came from and he said they only wanted bank statements of money going in and then coming out. so that is some good news for us

Noctifer

Fakent.ie wrote: »

Suprsied there is so little people on here that have cashed out, I'm getting the feeling that anyone who has made a significant amount is long term bullish on bitcoin and doesn't want to cash out yet or is hoping for this to replace fiat soon, Im leaning more in favor of the alt/alt tx Tax is also NOT true anymore I've spoken to a guy who cashed out and the revenue asked some questions as to where the money came from and he said they only wanted bank statements of money going in and then coming out. so that is some good news for us

It's similar in my country. Unless the money reaches the bank account it's not considered a profit.

GreeBo

Fakent.ie wrote: »

Suprsied there is so little people on here that have cashed out, I'm getting the feeling that anyone who has made a significant amount is long term bullish on bitcoin and doesn't want to cash out yet or is hoping for this to replace fiat soon, Im leaning more in favor of the alt/alt tx Tax is also NOT true anymore I've spoken to a guy who cashed out and the revenue asked some questions as to where the money came from and he said they only wanted bank statements of money going in and then coming out. so that is some good news for us

If you cash out completely then the intermediate txns are all irrelevant, not just alt - alt.

Intermediate txns are relevant when you dont completely cash out as you have realised a gain.