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Question on Cryptocurrency taxation

  • 25-12-2017 7:22pm
    #1
    Curlews
    Registered Users, Registered Users 2 Posts: 4 ✭


    Hi,I bought Bitcoin,Litecoin,Ethereum a few months ago. I have day traded for a while with altcoins and bitcoin. Do I have to pay capital gains tax on every trade as I have very many of them and I don't see how it would be possible to do that. Or is it paid when you cash out to Euro? If I don't cash out to euro does the CPT still apply from the increase in price of my Cryptocurrencies in terms of Euro? Would be great if someone can answer my questions.


Comments

  • #2
    Victor
    Registered Users, Registered Users 2 Posts: 78,580 ✭✭✭✭Victor


    You pay CGT on the total gain you make - you should be able to offset any losses against those gains.

    I don't know what happens if you sell your Bitcoin for (say) Ethereum.


  • #3
    Curlews
    Registered Users, Registered Users 2 Posts: 4 ✭Curlews


    Considering I wont convert my Crypto into fiat for a long while do I still have to pay capital gains tax on it?


  • #4
    Victor
    Registered Users, Registered Users 2 Posts: 78,580 ✭✭✭✭Victor


    Thinking about it, each sale (into whatever) might be considered taxable, but you should be able to offset any losses against those gains. So you would need to make a return every year. There is a rule about having to pay every seven(?) years for certain long-term holdings, but I'm not sure if it applies in this case.

    Note there is a CGT tax free allowance of about €1,000 per year.

    Cryptocurrencies are a bubble, you need an exit strategy.


  • #5
    Curlews
    Registered Users, Registered Users 2 Posts: 4 ✭Curlews


    How many times a year do you have to pay the CGT?Is it only applicable if I sell my cryptocurrency or do I have to sell 33% of my profits and give it away as tax?


  • #6
    Victor
    Registered Users, Registered Users 2 Posts: 78,580 ✭✭✭✭Victor


    Curlews wrote: »
    How many times a year do you have to pay the CGT?
    Once.
    Is it only applicable if I sell my cryptocurrency or do I have to sell 33% of my profits and give it away as tax?
    Read my previous posts.


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  • #7
    Curlews
    Registered Users, Registered Users 2 Posts: 4 ✭Curlews


    So lets say I bought 1 bitcoin exactly one year ago for a 1000 euro. Lets say its worth 10000 euro now. Since my profits are 9000 euros and the first 1270 euros are exempt from tax that makes 7730 euro taxable. Therefore I will need to sell 33% of my profits which is roughly 2551 euro and pay it in tax. Would that statement be correct?


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