Crypto tax situation - Read post 1 for thread banned users

I've been working and living abroad (EU), planning on moving back to Ireland in the next year or two.

I kept my Irish savings account open, and now and then having been selling off some crypto and moving it to my Irish savings a/c. I'm not earning money other than that into my Irish account, and have no PAYE contributions for the past 4 years or so.

I want to get on top of my crypto tax now, and make sure I pay whatever is due. Does my situation of earning and living abroad have any impact on how I should go about this? I was moving this into my Irish savings and not my foreign account to take advantage of the €1,270 CGT exemption.

I've been using Electrum wallet, which seems to give a good calculation of profit/loss made on each transaction, so that documentation side of things should be easier. My question is more from the point of view of what forms I should use to report it.

WashYourHands wrote: »

I had this debate recently. The person I was talking to has some crypto that he bought about 4 years ago. BTC (from EUR to BTC) and ETH (from some of the BTC to ETH). He said he doesn't have to pay any CGT until either goes back to Euro. I tried to argue that he would have to pay CGT when going from BTC to ETH but I didn't know enough to explain it. Is his ETH essentially worthless (legally) now since he hasn't made his tax payments?

Only a matter of time before revenue compiles a list of every irish citizen whos suspected of being involved in crytocurrency and conducts audits more invasive than an alien abduction cavity probing....

Stormington wrote: »

Good luck to them doing this while there's double-figure unemployment levels on the cards.

And people holding bags of ****coins to 0 to offset CGT gains.

Well surely they'll be desperate to squeeze as much tax as possible from any source?

The IRS in the states have been really on the case of anything to do with crypto since 2017.

Lex Luthor wrote: »

That’s like buying a bag of apples and trading half for a few oranges. How do you pay a tax liability from an orange even though it has value to someone

You don't have a tax liability from the oranges. You have a tax liablity from the gain (if any) accruing on the disposal of the apples.

Suppose you buy the apples at 10c each. Later, you exchange three apples for 2 oranges. Oranges, at this time, cost 20c each. So, the acquisition cost of your three apples, at 10c each, was 30c. You have disposed of them for 2 oranges, whose value (in total) is 40c (since it would have cost you 40c to buy two oranges). Your gain on disposal of the apples is (40c - 30c 10c. Your CGT is calculated on that gain.

It's not that hard.

Other posters have explained clearly that GGT is due, but in case anyone still thinks exchanging one asset for another doesn’t trigger CGT, Revenue’s website is pretty clear (just read the bits I highlighted and it is crystal clear): https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/index.aspx

Revenue wrote:

CGT is a tax you pay on any capital gain (profit) made when you dispose of an asset.

Revenue wrote:

An asset is something of value that can be converted into cash. You have disposed of an asset if you have:
* sold it
* gifted it
* exchanged it
* got compensation or insurance for it.

Lex Luthor wrote: »

Keeping track of the BTC trades is a nightmare

It can be a pain for sure, but the taxman doesn’t care ...

Actually, the same way some stock brokers calculate this automatically and provide a nice report at the end of the year; there is probably a market for exchanges to to that with crypto transactions (that could provide an incentive for people to strictly transact on their platform - but yes I know this brings more centralisation).

Lex Luthor wrote: »

Keeping track of the BTC trades is a nightmare

Bookkeeping for lots of business activities is an utter pain. Lots of enterprises have to employ people full-time to do nothing else.

But suck it up. If you don't want to keep the books, you don't have to make the trades. If you do want to make the trades then keep the books because, tax liabilities aside, you'll then have some clue as to how much money you are making or losing, which is presumably a thing that interests you.

Lex Luthor wrote: »

I'll have an overall value of profit/loss at the end of each year which is no issue, but keeping track of each individual trade is more time consuming than the transaction itself

It's often true of bookkeeping that accounting for a transaction takes more time than executing the transaction. That's not saying much in this case, since a trade in cryptocurrency can be executed almost instantly.

But, in any event, this isn't the revenue's problem. If you're engaged in a taxable activity then the cost of tax compliance, whether in time or money, is something you need to factor into your decision about whether it's worth your while to engage in the activity.

As far as I can see it's not that big a deal. Unless your chosen trading platform is utterly crapulous it will generate for you a record of all your transactions which includes, for each transaction, the crypto disposed of, the number of units disposed of, the crypto acquired, the number of units acquired and the date. The only additional datum you need for each transaction is the market value, in euros, on the date of the transaction, of a unit of the crypto acquired. If your trading platform doesn't supply that information you can add it yourself. This is probably most conveniently done at the time you enter into each transaction, but if you prefer you can wait until tax return time and add all the market values in at that point. Given all the data, calculating the gains and losses is not difficult and, if you set up a spreadsheet to do it in your first year, doing it in subsequent years should be a doddle.

seannash wrote: »

Apologies if this has been covered before but as some exchanges allow you to transfer your Fiat (Once you've converted your crypto to it) could you transfer this Fiat to your own mortgage account or any loans you have a payment schedule set up for.
Would there be a trail for this? I'm thinking I could pull out cash to use for my daily expenses (Shopping, petrol, entertainment etc etc) and transfer mortgage payments from the exchange to the accounts associated with the mortgage or loan

Some exchanges are restricting withdrawals to accounts from which you have deposited money before, which would block what you want to do as you can’t make a deposit from your mortgage account. Another blocker could be whether your back provides an IBAN for your mortgage account which can receive funds from external accounts not under your name (I am not sure what banks do related to this).

So the answer is: it might be possible but there are quite a few reasons why the exchange or the bank could prevent it.

But in any case I don’t get why you would do this with regards to this thread. Whether you leave cash on the exchange, withdraw it to a current account, or withdraw it to a mortgage account doesn’t make any difference in terms of tax liability (CGT is due when you sell assets, not when you withdraw cash).

Anyone know if we can put investments in coins no longer tradable on exchanges down as a tax loss?

Basically investing in a sh!t coin that once had value and no longer does, and now can’t be sold either?

What Bob said. It's not enough that the asset you invested in is worthless; the Revenue need to be satisfied not only that is worthless now but that there is no reasonable prospect that it will ever have any worth again.

So in the case of company shares, for example, the fact that trading in the share has been suspended or its listing has been cancelled is not enough to enable you to claim a capital loss; you need, e.g., for the company to be wound up with no distribution to shareholders, or for the company to be struck off. So I think you are looking for an analogous fate for a cryptocurrency. I have no idea what that might be, though.

AngryLoner wrote: »

OK, say:
- I buy 2 bitcoin in March for $3,000 each
- I buy 5 bitcoin in April for $6,000 each
- I buy 2 bitcoin August for $10,000 each.

I'm the proud owner of 9 bitcoins.

In September I sell the 6BTC for Euros at $10,500 each. Where do I work out my CGT? Do I calculate the profit on the most recently bought assets (eg 2@%10,000 and 4@€6,000?) or what? Is this FIFO/LIFO?

Stupid tax!

I'll DM you.

Can any recommend a free or cheap tax calculator?

All my trades etc are on Bitstamp, and koinly.io imported my trade history from there, and also shows me how much CGT is due for each year, but it costs $99 per year to be able to download a tax report.

If anyone in this thread is in total confusion on how to handle trades between different crypto currencies etc, it seems to be good to at least show your gains are above or below the €1,270 threshold. (and if you trust a 3rd party website to import your history from an exchange)

Stormington wrote: »

Is your tax bill more than $99?

Yes, not by much.

I still want to make an unprompted disclosure, and even though the CGT due isn't much, the amount of wallets, exchanges etc is complex.