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Crypto tax situation - Read post 1 for thread banned users

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Comments

  • #52
    Peregrinus
    Registered Users, Registered Users 2 Posts: 26,690 ✭✭✭✭Peregrinus


    What Bob24 said. Presuambly all crypto trading platforms allow you to realise your investment and turn it into the spendable currency of your choice; that's a pretty basic requirement for any investment. Once you do that you're free to spend the money however you wish, whether that be servicing your mortgage or settling your wine merchant's bill for 57 cases of vintage champagne; it's your money. Your choice about how you spend your investment gains doesn't affect your tax liablity at all, any more than your choice about how to spend your salary does.


  • #53
    langer91
    Registered Users Posts: 803 ✭✭✭langer91


    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?


  • #54
    Bob24
    Registered Users, Registered Users 2 Posts: 10,905 ✭✭✭✭Bob24


    langer91 wrote: »
    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?

    I think you can make a “claim for negligible value” to revenue. This basically means an asset you paid money for has became literally worthless and thus you have suffered irreversible capital loss. But basically it is up to Revenue whether to accept you claim or not (i.e. they could argue that the coins are still with you and could become popular and valuable again in the future in order to deny your claim).

    https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-19/19-01-09.pdf


  • #55
    Peregrinus
    Registered Users, Registered Users 2 Posts: 26,690 ✭✭✭✭Peregrinus


    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.


  • #56
    AngryLoner
    Registered Users Posts: 107 ✭✭AngryLoner


    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! :)


  • #57
    Stormington
    Registered Users, Registered Users 2 Posts: 522 ✭✭✭Stormington


    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.


  • #58
    Bob24
    Registered Users, Registered Users 2 Posts: 10,905 ✭✭✭✭Bob24


    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! :)

    It is FIFO, and your base currency to calculate capital gains should always be the euro value on the days you purchased and sold the asset.


  • #59
    radiospan
    Registered Users, Registered Users 2 Posts: 3,332 ✭✭✭radiospan


    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)


  • #60
    Stormington
    Registered Users, Registered Users 2 Posts: 522 ✭✭✭Stormington


    radiospan wrote: »
    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.
    Is your tax bill more than $99?


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  • #61
    radiospan
    Registered Users, Registered Users 2 Posts: 3,332 ✭✭✭radiospan


    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.


  • #62
    ordinaryfella
    Registered Users Posts: 153 ✭✭ordinaryfella


    Was hoping somebody might be able to shed some light on my situation. Got into crypto in late 2017 - early 2018 and made a bit of money initially, but of course hodl'd and my gains got wiped out. Mostly holding **** coins at this stage. When things started going down massively I kinda just wrote off the whole thing as an expensive lesson and forgot about it. Was pretty angry at myself for being so stupid tbh. Probably put in about 3.5k and it's worth maybe 500 now.

    Anyway, fast forward to now and it's looking like I'll make about a 10k capital gains tax profit on some stock. I never declared any of crypto gains/losses and I'm wondering if I can write these off now? I saw penalties for non declaring were mentioned earlier in the thread and I'm wondering how large these will be too? Any advice would be very appreciated.


  • #63
    bingobars
    Registered Users Posts: 156 ✭✭bingobars


    Bob24 wrote: »
    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

    What if I lost my keys?
    What if the exchange went into liquidation?


  • #64
    Lex Luthor
    Registered Users, Registered Users 2 Posts: 11,220 ✭✭✭✭Lex Luthor


    dont you just love governments etc with their stance to crypto

    they want to bash it and ban it and say its a scam but when you make any profit from it they want their 30% CGT


  • #65
    Bob24
    Registered Users, Registered Users 2 Posts: 10,905 ✭✭✭✭Bob24


    bingobars wrote: »
    What if I lost my keys?
    What if the exchange went into liquidation?

    If the exchange looses your holdings and they are deemed unrecoverable, I believe you can make a claim for negligible value as discussed on the previous page: https://www.boards.ie/vbulletin/showpost.php?p=114482022&postcount=54

    It is at Revenue's appreciation, but I assume lost keys would be considered to be your problem however, as it is more due to personal negligence (plus it would be hard to prove with certainty that a wallet used to be yours and that you now have no chance of recovering the keys for it anymore).


  • #66
    ordinaryfella
    Registered Users Posts: 153 ✭✭ordinaryfella


    Anyone shed light on the penalties that could be owed in my situation? If anyone has a good accountant based in Dublin area who can advise please dm me their details. Cheers.


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  • #67
    Bob24
    Registered Users, Registered Users 2 Posts: 10,905 ✭✭✭✭Bob24


    ordinaryfella wrote: »
    Was hoping somebody might be able to shed some light on my situation. Got into crypto in late 2017 - early 2018 and made a bit of money initially, but of course hodl'd and my gains got wiped out. Mostly holding **** coins at this stage. When things started going down massively I kinda just wrote off the whole thing as an expensive lesson and forgot about it. Was pretty angry at myself for being so stupid tbh. Probably put in about 3.5k and it's worth maybe 500 now.

    Anyway, fast forward to now and it's looking like I'll make about a 10k capital gains tax profit on some stock. I never declared any of crypto gains/losses and I'm wondering if I can write these off now? I saw penalties for non declaring were mentioned earlier in the thread and I'm wondering how large these will be too? Any advice would be very appreciated.

    Just to clarify: have the cryptocurrencies for which you want to record a loss been sold already, or they are still in your possession and you are planning to dispose of them to generate the loss and offset it against you other capital gains?

    And also, is you concern to get a penalty for not having declared your losses earlier?


  • #68
    ordinaryfella
    Registered Users Posts: 153 ✭✭ordinaryfella


    Bob24 wrote: »
    Just to clarify: have the cryptocurrencies for which you want to record a loss been sold already, or they are still in your possession and you are planning to dispose of them to generate the loss and offset it against you other capital gains?

    And also, is you concern to get a penalty for not having declared your losses earlier?

    You are correct on both accounts. They are still in my possession, but I'm thinking of selling now to record the loss to offset the capital gains. Yes, I am concerned about the penalties and how high these would be.


  • #69
    Bob24
    Registered Users, Registered Users 2 Posts: 10,905 ✭✭✭✭Bob24


    ordinaryfella wrote: »
    You are correct on both accounts. They are still in my possession, but I'm thinking of selling now to record the loss to offset the capital gains. Yes, I am concerned about the penalties and how high these would be.

    With the caveat that I’m not a tax advisor ans this is just my opinion, I really don’t think you have any issue here.

    Since you haven’t sold those assets, you haven’t realised any loss yet, so unless I am mistaken you aren’t behind with declaring anything or at risk of any penalty.

    So basically you could sell them now, and on your CGT return for this year you just declare the loss on the crypto and then gain on the shares (you will not be late to declare anything as both the shares and crypto will have been disposed of this year). And Revenue should calculate your CGT due as: gains on your shares minus losses on your crypto minus 1270 (1270 euros is your yearly personal CGT exemption).


  • #70
    relax carry on
    Registered Users, Registered Users 2 Posts: 4,085 ✭✭✭relax carry on


    ordinaryfella wrote: »
    You are correct on both accounts. They are still in my possession, but I'm thinking of selling now to record the loss to offset the capital gains. Yes, I am concerned about the penalties and how high these would be.

    If you purchased a specific asset and did not sell it/exchange it then you haven't created a taxable event. If you exchanged one crypto currency for another that's a taxable event. Whether there is a gain or a loss is for you to work out based on your own records.

    If you literally bought some Cryptocurrency and did nothing with it then no taxable event has taken place. You can sell them now and include their loss in your calculations for the CGT due on your gain.

    There's no penalties if no taxable event has taken place yet.


  • #71
    ordinaryfella
    Registered Users Posts: 153 ✭✭ordinaryfella


    Hmm, but from the trade of btc to eth and then buying gnt with eth I believe there should be cgt on each of these transactions. If these happened in 2018 how would I calculate the penalties? I will get an accountant but just want to have a ball park for what I'm looking at here. Thanks for the replies!


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  • #72
    Bob24
    Registered Users, Registered Users 2 Posts: 10,905 ✭✭✭✭Bob24


    ordinaryfella wrote: »
    Hmm, but from the trade of btc to eth and then buying gnt with eth I believe there should be cgt on each of these transactions. If these happened in 2018 how would I calculate the penalties? I will get an accountant but just want to have a ball park for what I'm looking at here. Thanks for the replies!

    Ah OK I missed-out the fact that you have been trading cryptos for other cryptos back then. Yes CGT is due on these and if there were large gains than 1270 euros on those trades you might have an issue.


  • #73
    ordinaryfella
    Registered Users Posts: 153 ✭✭ordinaryfella


    Cheers Bob, so let's map out the following:

    Sep 2017 bought two eth at 350.

    Jan 2018 Traded one eth for gnt. Price of gnt put vlaue of one eth at 500 (+150)

    Feb 2018 Traded one eth for gnt. Price of gnt put vlaue of one eth at 600 (+250)

    Oct 2020 Sell all my gnt for 200 (200 - 1100) so I have -900

    I owe cgt for 2018 if I exceeded the tax free threshold, but I could sell everything this year to make a loss to write off against my cgt.

    Hmm, trying to figure out if a made more than 1270 via my trades back in 2018 should be fun...


  • #74
    Peregrinus
    Registered Users, Registered Users 2 Posts: 26,690 ✭✭✭✭Peregrinus


    ordinaryfella wrote: »
    I owe cgt for 2018 if I exceeded the tax free threshold, but I could sell everything this year to make a loss to write off against my cgt.
    You can set your losses for this year against your gains for this year, or you can carry them forward to set off against losses for future years. You can't carry them back to set off against gains in past years.
    ordinaryfella wrote: »
    Hmm, trying to figure out if a made more than 1270 via my trades back in 2018 should be fun...
    On the figures you give, no, you didn't. You made gains of 150 + 250 = 400. Unless you made other gains in 2018 that you haven't mentioned that would bring your total for 2018 over 1,270?


  • #75
    ordinaryfella
    Registered Users Posts: 153 ✭✭ordinaryfella


    Ah sorry, meant CGT gains this year. I made more trades than the examples but I'd be surprised if they were above 1,270 in profit, perhaps a very small amount. The hodl killed me tbh. This has really helped my understanding, thanks folks.


  • #76
    Bob24
    Registered Users, Registered Users 2 Posts: 10,905 ✭✭✭✭Bob24


    ordinaryfella wrote: »
    Ah sorry, meant CGT gains this year. I made more trades than the examples but I'd be surprised if they were above 1,270 in profit, perhaps a very small amount. The hodl killed me tbh. This has really helped my understanding, thanks folks.

    Yeah assuming the gains you made in 2018 are below 1270 euros, you don't have any pending liability or risk of being fined based one what you said.

    As Peregrinus said, in 2018 the CGT you would have owed is for the disposal of your two ETH (400 euros in total). Since this is below the yearly allowance of 1270 you don't owe Revenue anything for that year, so not risk of fine/penalty.

    Now in in 2020 you have a loss of 900 euros for the disposal of your GNT. This can be offset against any gains you made on something else.


  • #77
    Seurat
    Registered Users Posts: 98 ✭✭Seurat


    Bob24 wrote: »
    Yeah assuming the gains you made in 2018 are below 1270 euros, you don't have any pending liability or risk of being fined based one what you said.

    As Peregrinus said, in 2018 the CGT you would have owed is for the disposal of your two ETH (400 euros in total). Since this is below the yearly allowance of 1270 you don't owe Revenue anything for that year, so not risk of fine/penalty.

    Now in in 2020 you have a loss of 900 euros for the disposal of your GNT. This can be offset against any gains you made on something else.


    Does anyone know how Revenue distinguishes between trader and joe soap who makes some trades?
    My return shows ~400 trades yet these can be maybe 30 trades broken up (eg sell at market value, so the price fluctuates, meaning more than one trade made)

    Does the revenue have a limit on amount of trades before i pay the 20/40% instead of cgt?


  • #78
    Seurat
    Registered Users Posts: 98 ✭✭Seurat


    Bob24 wrote: »
    Yeah assuming the gains you made in 2018 are below 1270 euros, you don't have any pending liability or risk of being fined based one what you said.

    As Peregrinus said, in 2018 the CGT you would have owed is for the disposal of your two ETH (400 euros in total). Since this is below the yearly allowance of 1270 you don't owe Revenue anything for that year, so not risk of fine/penalty.

    Now in in 2020 you have a loss of 900 euros for the disposal of your GNT. This can be offset against any gains you made on something else.


    Does anyone know how Revenue distinguishes between trader and joe soap who makes some trades?
    My return shows ~400 trades yet these can be maybe 30 trades broken up (eg sell at market value, so the price fluctuates, meaning more than one trade made)

    Does the revenue have a limit on amount of trades before i pay the 20/40% instead of cgt?


  • #79
    Peregrinus
    Registered Users, Registered Users 2 Posts: 26,690 ✭✭✭✭Peregrinus


    No, there's no set number of trades that tips you into being a trader, or not being a trader. It's a judgment that has to take into account a number of factors - size of trades, frequency of trades, number of trades, degree of system and method involved, amount of time you devote to the activity, etc, etc.

    If you're giving about 30 instructions per year, that's less than one a week. Unless you're trading pretty large amounts each time, or consistently spending a good amount of time researching the markets and choosing the timing and volume of your trades, I wouildn't think you are likely to be viewed as carrying on a trade.

    In general the revenue default to treating activities like this as investment, not trade. Nine times out of ten when there's a row about this its because the taxpayer claims to be carrying on a trade (because he has made losses, and he wants to set them off against the income from his day job) and the Revenue insisting that, no, his activity does not amount to a trade. It's comparatively unusual for the fight to be the other way around.


  • #80
    Bob24
    Registered Users, Registered Users 2 Posts: 10,905 ✭✭✭✭Bob24


    Agree with the above, and I would add that whether or not the taxpayer has a full time job and is a PAYE worker might play a role as well (if someone is paying taxes on a full time job to Revenue which has nothing to do with trading, it seems hard to argue that their main activity is to be a professional trader).


  • #81
    Peregrinus
    Registered Users, Registered Users 2 Posts: 26,690 ✭✭✭✭Peregrinus


    Bob24 wrote: »
    Agree with the above, and I would add that whether or not the taxpayer has a full time job and is a PAYE worker might play a role as well (if someone is paying taxes on a full time job to Revenue which has nothing to do with trading, it seems hard to argue that their main activity is to be a professional trader).
    Well, yes, but, on a nitpick, the question is not whether your main activity is as a professional trader; it's just whether you're carrying on a trade. You can certainly carry on a trade part-time, and derive only the smaller part of your income from it. I recall a case of a man who had a five-days-a-week paid job, but also kept a small antique shop which only traded on Saturdays and bank holidays, and largely catered to tourists/visitors. The shop barely covered its own expenses but it was a trade.


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  • #82
    unkel
    Registered Users, Registered Users 2 Posts: 65,717 ✭✭✭✭unkel
    Chauffe, Marcel, chauffe!


    Peregrinus wrote: »
    Well, yes, but, on a nitpick, the question is not whether your main activity is as a professional trader; it's just whether you're carrying on a trade. You can certainly carry on a trade part-time, and derive only the smaller part of your income from it. I recall a case of a man who had a five-days-a-week paid job, but also kept a small antique shop which only traded on Saturdays and bank holidays, and largely catered to tourists/visitors. The shop barely covered its own expenses but it was a trade.

    And to back you up there, it is generally considered a trade by Revenue if you sell 6 or more cars per year. Below that, cars are considered your private cars and all profits are tax free. Above that, you pay income tax at your marginal rate (over your profits)

    This is independent on whether you are PAYE or not, whether you have another business or not.

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  • #83
    jmlad2020
    Registered Users, Registered Users 2 Posts: 691 ✭✭✭jmlad2020


    Can someone generally point me in the direction of where I can understand the whole cashing out/paying 33% capital gains taxmore easily?

    I have been trading alt coins since 2016 on 5 different exchanges.. with 2 different bank accounts.. with many gains/losses in between. I have not kept track one bit..and have sold BTC for one coin, then to another coin and so on.. then back into BTC hundreds of times. 1000s of different transactions.. is filing the revenue form as simple as attaching an export of these trade sheets?

    Are Revenue actually looking for the full profit/loss on each trade.... If so that'll be an enjoyable task.


  • #84
    Peregrinus
    Registered Users, Registered Users 2 Posts: 26,690 ✭✭✭✭Peregrinus


    You need to calculate the gain/loss on each trade, expressed in euros. Yes, it's a fun task. It will be made even more fun by the fact that you have allowed four years worth of trades to accumulate before starting the task. Plus, you may be looking at penalties/interest in respect of the earlier years because you are making your returns after the due date. So I wouldn't put this off any longer; it just gets funner and funner if you do.


  • #85
    SpacialNeeds
    Registered Users Posts: 203 ✭✭SpacialNeeds


    Isn't the point of crypto that it's difficult to trace? Couldn't you just continue trading without declaring any of it and say it was all lost? Revenue arent going to be bothered going back and tracking all your shltcoins unless you're Al Capone or something. I'd nearly pay them whatever fee to calculate that for me past a certain point.

    I'm not currently trading, for the record. Made €7k on just Litecoin in 2018 and declared it to revenue when I cashed out.


  • #86
    Lex Luthor
    Registered Users, Registered Users 2 Posts: 11,220 ✭✭✭✭Lex Luthor


    SpacialNeeds wrote: »
    Isn't the point of crypto that it's difficult to trace? .

    every transaction is recorded


  • #87
    SpacialNeeds
    Registered Users Posts: 203 ✭✭SpacialNeeds


    Recorded by whoever undertook the transaction.

    The initial transaction usually being bank to crypto dealer, after this money is out of the banking system, it's a lot more difficult for revenue to ascertain what has happened it.

    ie €2,000 purchase of cryptocurrency
    exchange cc1 profit for cc2&3
    losses made, balancing any profit

    You're hardly expected to declare every single crypto transaction you do to Revenue? I don't send them my bank statements to them every year, why should they be briefed on this, especially if they're not likely to make any money off pursuing it?

    There are full-on state surveillance levels of involvement being suggested by posters here.


  • #88
    Bob24
    Registered Users, Registered Users 2 Posts: 10,905 ✭✭✭✭Bob24


    SpacialNeeds wrote: »
    Isn't the point of crypto that it's difficult to trace?

    In short: no.
    SpacialNeeds wrote: »
    Recorded by whoever undertook the transaction.

    The initial transaction usually being bank to crypto dealer, after this money is out of the banking system, it's a lot more difficult for revenue to ascertain what has happened it.

    If you are transacting in Bitcoins, every transaction is publicly available on the blockchain.

    The IRS in the US already have all the blockchain analytics software they need to track transactions (and I suspect a few other large European countries as well as Japan/Korea are as well). I doubt Revenue is up to speed yet, but eventually they will be.


  • #89
    SpacialNeeds
    Registered Users Posts: 203 ✭✭SpacialNeeds


    Heh, I'd better tell that to all the lads who are dealing drugs on the dark web.


  • #90
    Dnxncofiruwvx
    Closed Accounts Posts: 39 ✭Dnxncofiruwvx


    SpacialNeeds wrote: »
    Heh, I'd better tell that to all the lads who are dealing drugs on the dark web.

    They generally use Monero these days, which doesn’t have a public ledger and in theory at least provides anonymous transactions through a process known as ring signatures. Monero is the exception to the rule however when it comes to crypto transactions, most are verifiable on the blockchain, that’s the point of it.

    I do agree with you that unless you’re a whale revenue probably aren’t going through every transaction you’ve made. They could if they wanted, but it would require so much in resourcing to go after everyone.


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  • #91
    relax carry on
    Registered Users, Registered Users 2 Posts: 4,085 ✭✭✭relax carry on


    SpacialNeeds wrote: »
    Recorded by whoever undertook the transaction.

    The initial transaction usually being bank to crypto dealer, after this money is out of the banking system, it's a lot more difficult for revenue to ascertain what has happened it.

    ie €2,000 purchase of cryptocurrency
    exchange cc1 profit for cc2&3
    losses made, balancing any profit

    You're hardly expected to declare every single crypto transaction you do to Revenue? I don't send them my bank statements to them every year, why should they be briefed on this, especially if they're not likely to make any money off pursuing it?

    There are full-on state surveillance levels of involvement being suggested by posters here.

    You are engaged in a taxable activity. Its your responsibility to ensure you are compliant as it's a self assessed system. You file your CGT return each year but don't attach your workings showing every transaction unless requested. If you are requested during an intervention and you can't back up your figures, that's when you'll have possibly significant issues.


  • #92
    punch bob
    Registered Users Posts: 13 ✭punch bob


    Hi. I hope someone can shed light into this situation. Let's say I bought 10 ETH at €100 and sold at €850 which means I gained €7650. I know I would have paid CG tax (of about €2105) by this time. However, instead of paying tax, I invested the whole amount of €8500 from selling ETH to investing VET thinking it’ll moon.

    My question is how will this put me in a complicated tax situation? I know people do this but I wonder how do they manage their taxes?

    NB. I have never considered this due to tax obligations but it’s tempting to do so in this bull run and make the most out of it. Thanks.


  • #93
    keane2097
    Registered Users, Registered Users 2 Posts: 17,775 ✭✭✭✭keane2097


    punch bob wrote: »
    Hi. I hope someone can shed light into this situation. Let's say I bought 10 ETH at €100 and sold at €850 which means I gained €7650. I know I would have paid CG tax (of about €2105) by this time. However, instead of paying tax, I invested the whole amount of €8500 from selling ETH to investing VET thinking it’ll moon.

    My question is how will this put me in a complicated tax situation? I know people do this but I wonder how do they manage their taxes?

    NB. I have never considered this due to tax obligations but it’s tempting to do so in this bull run and make the most out of it. Thanks.

    If you sold it you owe the €2105 regardless of what you do with the proceeds.


  • #94
    Figel Narage
    Registered Users, Registered Users 2 Posts: 474 ✭✭Figel Narage


    I've been getting FOMO for the last month but what stopped me from getting involved months ago was the tax situation and where to buy the crypto's. I guess I'll wait for the crash before considering investing but I'd need to understand it a lot more before I decide to invest


  • #95
    Stormington
    Registered Users, Registered Users 2 Posts: 522 ✭✭✭Stormington


    Figel Narage wrote: »
    I've been getting FOMO for the last month but what stopped me from getting involved months ago was the tax situation and where to buy the crypto's. I guess I'll wait for the crash before considering investing but I'd need to understand it a lot more before I decide to invest

    You could be waiting a long while, depending how you define the crash.

    Koinly does tax reports. I used it to report taxes in December and will use it again next week.

    Link your wallets (as many you want).
    Run the report - its free.
    If you want a document to send for tax returns, buy a report (80 quid).
    Use the below link to get money off a tax report.
    https://koinly.io/?via=D3F3A819


  • #96
    Peregrinus
    Registered Users, Registered Users 2 Posts: 26,690 ✭✭✭✭Peregrinus


    punch bob wrote: »
    Hi. I hope someone can shed light into this situation. Let's say I bought 10 ETH at €100 and sold at €850 which means I gained €7650. I know I would have paid CG tax (of about €2105) by this time. However, instead of paying tax, I invested the whole amount of €8500 from selling ETH to investing VET thinking it’ll moon.

    My question is how will this put me in a complicated tax situation? I know people do this but I wonder how do they manage their taxes?

    NB. I have never considered this due to tax obligations but it’s tempting to do so in this bull run and make the most out of it. Thanks.
    keane2097 wrote: »
    If you sold it you owe the €2105 regardless of what you do with the proceeds.
    Not necessarily. Suppose the sale of the ETH happens early in the year. The tax isn't due for many months. In the meantime you park the money in VET, hoping for a further gain. Your hopes are disappointed; VET tanks. Towards the end of the year you can see the writing on the wall, so you sell the VET, or some of it, to generate an allowable loss which you can offset against the gain which accrued on your sale of ETH earlier in the year.

    Crucial that you do this in the same year that you accrued the gain; if you accrue a loss in the following year you can't carry it back to reduce this year's tax liablity.


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  • #97
    punch bob
    Registered Users Posts: 13 ✭punch bob


    Ethereum was purchased with euro using an Irish bank account while in Ireland using Binance. Then Ethereum was sold and the profits were then withdrawn to a Slovakian bank. Where would the taxes be paid? Asking for a friend. Thanks.


  • #98
    myshirt
    Registered Users, Registered Users 2 Posts: 5,245 ✭✭✭myshirt


    punch bob wrote: »
    Ethereum was purchased with euro using an Irish bank account while in Ireland using Binance. Then Ethereum was sold and the profits were then withdrawn to a Slovakian bank. Where would the taxes be paid? Asking for a friend. Thanks.

    Where are you tax resident?

    Edit: Sorry, where is your friend tax resident? Where do you live, work, etc. Where have you lived, worked, bought groceries, socialised for the last 3/4 years?


  • #99
    punch bob
    Registered Users Posts: 13 ✭punch bob


    myshirt wrote: »
    Where are you tax resident?

    Edit: Sorry, where is your friend tax resident? Where do you live, work, etc. Where have you lived, worked, bought groceries, socialised for the last 3/4 years?


    He’s been here for long and been living and working here for many years now. I’m sure he’s a tax resident here. So, he has to pay it here despite receiving the money to a non-Irish account?


  • #100
    Bob24
    Registered Users, Registered Users 2 Posts: 10,905 ✭✭✭✭Bob24


    punch bob wrote: »
    He’s been here for long and been living and working here for many years now. I’m sure he’s a tax resident here. So, he has to pay it here despite receiving the money to a non-Irish account?

    If he is still working here, he definitly is a tax resident (or ordinarily resident). But this isn't the only deciding factor.

    I don't want to give direct tax advice and your friend should satisfy himself that he understands the tax rules and act accordingly, but the following quotes from this document should give directions (as you can see, being "domiciled" in Ireland or not does make a difference):
    Deloitte wrote:

    An Irish-resident or ordinarily resident and domiciled individual is liable to Irish capital gains tax on the gains arising on the disposal of chargeable assets worldwide.

    A non-Irish-domiciled individual who is resident or ordinarily resident is liable to capital gains tax on the following:
    • Gains arising on the disposal of chargeable assets situated in Ireland at the time of the disposal
    • Remittances into Ireland of proceeds of gains from the disposal of assets situated outside of Ireland.
    Deloitte wrote:

    Domicile
    This term is not defined in the Irish tax code. It is a complex term and is primarily a question of fact, based on the notion of an individual’s permanent home to which that person intends ultimately to return. A person can be considered domiciled in the country which is the individual’s permanent home although they are temporarily resident in another country.
    An individual can never be without a domicile. Generally, an individual is domiciled in the country of nationality and in which the greater part of the person’s life is spent i.e. the domicile of origin. Once an individual has reached the age of majority, “domicile of origin” can be abandoned and a “domicile of choice” can be acquired.
    In this situation, factors of presence and intention would be required.


  • #101
    myshirt
    Registered Users, Registered Users 2 Posts: 5,245 ✭✭✭myshirt


    punch bob wrote: »
    He’s been here for long and been living and working here for many years now. I’m sure he’s a tax resident here. So, he has to pay it here despite receiving the money to a non-Irish account?

    Yes, absolutely.

    You could send it to an account in Timbuktu and it's the same story. If he is domiciled in Slovakia he may get hit on the double, so it was a bad move moving the funds to an account over there. Keep future funds in Ireland would be my take. The tax here is bad enough, than to be hitting yourself on the double.

    Have him pay the tax and pay it quickly, as he won't want to find himself in a bad place when the time comes. Often people think they have the nut cracked, and sher they'll never get me etc, and if they do sher I won't have a washer in my pocket so they can go get fxcked.
    Etc etc.

    Heard it all before. Hammered would be an understatement for people who try pull a stunt.


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