Capital Gains Tax (Crypto). When can it become Income Tax?

dinlayback

Hi folks. Went over my CGT with accountant today and he mentioned due to the volume and gains that it may be considered "Income Tax" by Revenue. Does anyone have any clarification on this? In a slight state of shock. At what point can Revenue decide its not CGT and is indeed income? Specifically relevant to crypto trades.

Is there a defined gain/volume level or is it something they argue on a case by case basis? Just to note I do have a salaried wage from my own business.

He may have meant the volume of trades that you made during the year could lead Revenue to think you are effectively trading Crypto rather than buying and selling the odd amount here and there.

How many crypto transactions have you made in 2021?

dinlayback

https://www.boards.ie/discussion/comment/118326700#Comment_118326700

That's what he was getting at I believe, yeah. Over 3000 txns during 2021.

I don't know of any number of transactions that once breached determines you as a trader, it could be on a case by case basis. But you're doing roughly 8 trades a day on average, not exactly the same as a guy who buts some Bitcoin in January then sells it in October.

Similar to somebody putting a bet on the grand national versus a person who is playing poker day in day out. One is clearly trying to make a living out of it.

dinlayback

I see. Thanks for that.

relax carry on

https://www.boards.ie/discussion/2058222989/capital-gains-tax-crypto-when-can-it-become-income-tax

There's no set definition but consider Badges of Trade. The link below relates to CT but it will give you an idea. The volume of your trades is the issue.

https://www.charteredaccountants.ie/taxsource/1997/en/act/pub/0039/tb/sec0021-1-tb.html

Viscount Aggro

CGT is one amount to report,

What you paid, what you sold, in aggregate.

None of their business how many transactions were involved.

Unless you want to volunteer yourself with handcuffs.

Fantomas9mm

Hey folks.

I have about 10k profit in Crypto on Coinbase.

Bought years ago and have just left it for years, looking to cash out now and not sure what i should do regarding CGT ?

I am also going for a mortgage and conscious that i may have to provide bank statements which will show my 10k going in …

Any advice on what i should do, i am leaning one way but just curious what other people have done .

Thanks

cnocbui

https://www.boards.ie/discussion/comment/121832017#Comment_121832017

Just pay the CGT, then your bank statement will show x amount flowing back into your account improving your deposit basis and showing your overall financial accumen.

No financial institution should be looking askance at an investment in BTC, though this is Irealnd and a generally logic-free zone so maybe I am wrong.