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question regarding tax

  • 18-12-2019 7:05am
    #1
    alicante2011
    Registered Users Posts: 7 ✭


    Hello All,
    I'm learning to trade cryptos and I've made small profit. Do I need to pay Capital Gain Tax (or anything similar). The profit is very small but I don't want to get into problems for not reporting this.


Comments

  • #2
    grindle
    Registered Users Posts: 6,026 ✭✭✭grindle


    alicante2011 wrote: »
    Hello All,
    I'm learning to trade cryptos and I've made small profit. Do I need to pay Capital Gain Tax (or anything similar). The profit is very small but I don't want to get into problems for not reporting this.

    Any profit made over €1270.


  • #3
    funkyuser
    Registered Users Posts: 75 ✭✭funkyuser


    What about trading on margin? If he doesnt take ownership of the asset, its gambling and therefore tax free?


  • #4
    grindle
    Registered Users Posts: 6,026 ✭✭✭grindle


    funkyuser wrote: »
    What about trading on margin? If he doesnt take ownership of the asset, its gambling and therefore tax free?

    It's seen as being bought on your behalf. On the upside, if you lose all your crypto due to a bad margin trade, you can offset the loss against any gains made.


  • #5
    Bob24
    Registered Users Posts: 10,905 ✭✭✭✭Bob24


    grindle wrote: »
    Any profit made over €1270.

    I was wondering the other day - if someone has a capital gain below that threshold, are they still meant to declare it to revenue even though no tax is due?


  • #6
    grindle
    Registered Users Posts: 6,026 ✭✭✭grindle


    Maybe as a dotting i crossing t exercise.
    I'd suppose if you made big gains a few years in a row and it drops off they might wonder where you went, but if you're not on the map then you're just handing them extra worthless paperwork.
    Will ask friend in Revenue later, but I'd say the answer will be "Remember we're working on other things and don't want our time taken up with useless information."


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  • #7
    Bob24
    Registered Users Posts: 10,905 ✭✭✭✭Bob24


    grindle wrote: »
    Will ask friend in Revenue later, but I'd say the answer will be "Remember we're working on other things and don't want our time taken up with useless information."

    That would be the right thing to do IMO and I assume this is when most people do in practice. But I am wondering if it actually is the law/policy that nothing is required, as I'd rather not be exposed to some overzealous Revenue person one day looking for everything you might have done wrong to build file against you.


  • #8
    funkyuser
    Registered Users Posts: 75 ✭✭funkyuser


    grindle wrote: »
    It's seen as being bought on your behalf. On the upside, if you lose all your crypto due to a bad margin trade, you can offset the loss against any gains made.


    My accountant compared margin trading to spreadbetting, pretty much saying that any time youre betting on price movements and not taking ownership of the underlying asset it is not a capital gain or capital loss and not even taxed as income, its gambling and not taxed. I was advised to just keep records to prove the source of funds, should I make profits this way.

    edit: yeah its possible my accountant is incorrect


  • #9
    Lex Luthor
    Registered Users Posts: 11,220 ✭✭✭✭Lex Luthor


    Just transfer your crypto to a hard wallet and pay for anything you want in crypto

    Who’s gonna know:D:D


  • #10
    super ted rules
    Registered Users Posts: 31 ✭super ted rules


    That's a similar view to what I've learned. But ultimately there's no clarity on what's acceptable.

    If you use a platform like Bitmex you're seltting in BTC. A win might be seen as a purchase, and a loss as a sale of BTC. If you have held bitcoin for some time, you could be crystalising large gains unintentionally.

    If you use a platform like FTX and their BULL token, which settles in USD you could seperate out this risk as the token is not BTC but something different.
    funkyuser wrote: »
    My accountant compared margin trading to spreadbetting, pretty much saying that any time youre betting on price movements and not taking ownership of the underlying asset it is not a capital gain or capital loss and not even taxed as income, its gambling and not taxed. I was advised to just keep records to prove the source of funds, should I make profits this way.

    edit: yeah its possible my accountant is incorrect


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